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Stock Symbol (Tickers)
Share
What is a 'Stock Symbol (Tickers)'
A stock symbol is a unique series of letters assigned to a security for trading purposes. NYSE and AMEX listed stocks have three characters or less. Nasdaq-listed securities have four or five characters.
Stock Symbols are also known as "ticker symbols."
BREAKING DOWN 'Stock Symbol (Tickers)'
In the 1800s when stock exchanges were introduced into the market, floor traders had to communicate the stock price of a traded company by writing or shouting out the name of the company in full. As the number of publicly traded companies increased from the dozens to the hundreds, they soon realized that this process was time consuming and held up the information queue as prices changed frequently. To be more efficient in relaying price changes on company stock to investors, company names were shortened to 1 to 5 alpha symbols.
In addition to saving time and capturing a specific stock price at the right time, stock symbols are useful when two or more companies have similar names. For example, CIT Group Inc. and Citigroup Inc. have very similar names but are not affiliated with each other. The former is a financial holding company, and the latter is a financial services and investment banking firm. An investor who wants to purchase shares in one would find it easier to know the stock symbol of the company he is interested in. In this case, both firms trade on the New York Stock Exchange (NYSE) with the ticker symbols ‘CIT’ for CIT Group Inc. and ‘C’ for Citigroup Inc.
There are also companies that are spinoffs of the same company and have similar stock symbols. In November 2015, Hewlett-Packard split into two separate companies – Hewlett-Packard Enterprise and HP Inc. Hewlett-Packard Enterprise, with stock symbol HPE, serves as the business service and hardware division and focuses on servers, storage, networking, and security. HP Inc. is the consumer-facing computer and printer division and has a smaller market for its products than HPE. The stock symbol for HP Inc. is HP. An investor looking to purchase shares of HP Inc. should conduct his or her due diligence to ensure that s/he has the right stock symbol for the right company division.
Some stock symbols indicate whether the shares of a company have voting rights, especially if the company has more than one class of shares trading in the market. For example, Alphabet Inc. (formerly, Google) has two class of shares trading on the NASDAQ with stock symbols GOOG and GOOGL. Common shareholders of GOOG have no voting rights since GOOG shares are Class C shares, while GOOGL shares are Class A shares and have one vote each. Another example is Berkshire Hathaway which has two class of shares trading on the NYSE, Class A and Class B. Class A shares are listed with stock symbol BRK.A and Class B shares which have lower voting rights than Class A trade with the symbol BRK.B.
Preferred shares are also represented by ticker symbols on the exchanges, although different sources quote preferred shares in different ways. For example, Bank of America common shares trade with the stock symbol BAC. The Bank of America non-cumulative preferred Series D share will be quoted as BAC-PD on Yahoo! Finance, BAC-D on S&P, BACPRD on NYSE, BAC+D on Charles Schwab, BACpD on E-Trade, BAC.PD on Marketwatch, BAC_PD on Vanguard, and BAC/PD on Bloomberg.
Companies trading on the NYSE typically have three or fewer letters representing their stock symbols. NASDAQ generally has four- or five-letter symbols e.g. Adobe Systems (ADBE), Apple, Inc. (AAPL), Alphabet Inc. (GOOG or GOOGL) and Groupon Inc. (GRPN). Some companies that trade on the NASDAQ with fewer than four letters include Facebook (FB) and Moneygram International (MGI). However, companies moving from the NYSE to NASDAQ can retain their stock symbols.
Additional Symbols and Trading Status
Stock symbols are also used to convey information about the trading status of a company to investors. This information is usually represented on the NYSE by one letter following a dot after the stock’s standard company symbol. The NASDAQ presents the letter as a fifth letter symbol e.g. ACERW where the first four letters is the stock symbol for Acer Therapeutics Inc. (ACER) and the last letter ‘W’ indicates that the shares have warrants attached. A company that is in bankruptcy proceedings will have a Q after its symbol, and a non-US company trading in the US financial markets will have the letter Y following its ticker symbol. The meaning of the letters from A to Z are shown here:
A – Class A shares e.g BRK.A
B – Class B shares e.g. BRK.B
C – Issuer Qualification Exception – Company does not meet all the exchange’s listing requirements but can remain listed on the exchange for a short time period.
D – New issue of existing stock
E – Delinquent or missed one or more SEC required filings
F – Foreign issue
G – First convertible bond
H – Second convertible bond
I – Third convertible bond
J – Voting share
K – Non-voting share
L – Miscellaneous e.g. foreign preferred, third class of warrants, preferred when-issued, fifth class preferred shares, etc.
M – Fourth class preferred shares
N – Third class preferred shares
O – Second class preferred shares
P – First class preferred shares
Q – In bankruptcy proceedings
R – Rights
S – Shares of beneficial interest
T – With warrants or with rights
U – Units
V – When-issued and when-distributed. These shares are about to go through a corporate action plan that has already been announced, such as a stock split.
W – Warrants
X – Mutual Funds
Y – American Depository Receipt (ADR)
Z – Miscellaneous situations (same as the letter L)
.PK – Pink sheets stock
SC – Nasdaq SmallCap
NM – Nasdaq National Market
Investors should carry out due diligence on stocks that have the following letters – C, E, L, Q, V, Z – after the ticker symbols before buying shares in the companies.
Hard-Coded Stock
Share
This is a term that refers to a company's stock symbol or ticker symbol. Every security listed anywhere on the globe has a unique symbol for the security. Knowing the symbol allows investors to check the price of the security.
BREAKING DOWN 'Hard-Coded Stock'
In the U.S., on the New York Stock Exchange, stocks can have symbols with one, two or three letters in the symbol. Nasdaq-listed stocks have stock symbols with four or five letters.
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Tuesday, 30 January 2018
Did Providence Make Vice President Bawumia Ill So That He Would Undergo A Damascene Conversion In London?
It is often said by the deeply religious that God works in mysterious ways. Indeed. The question then is: Did Providence make Vice President Bawumia ill so that he would travel to the UK, visit the Positive Money UK head office, and undergo a Damascene conversion to the monetary reforms that that advocacy group seeks - and return to champion the cause of monetary reform and green economics in Ghana: and thus assure a more sustainable future for present and future generations of our people?
Perhaps Gabby Asare Otchere-Darko, Bawumia's minder-in-chief in London, who unquestionably (and rightly) seeks a place in the Pantheon of great African leaders for President Akufo-Addo - having now realised that regardless of whatever revisionist propaganda he and his co-conspirators dream up, his forbear Dr. J. B. Danquah, will never qualify for such a place because of his repulsive Akan tribal-supremacist beliefs and for being an agent of Western imperialism and lackey of sundry Western intelligence agencies during his day - should arrange for Dr. Bawumia to be hosted by Positive Money UK and have conversations with some of the advocates for monetary reform in Britain.
It will hopefully enable Bawumia to finally step out of the shadow of conventional economic thinking, and commit to growing Ghana's nascent green economy - instead of the ruinous GDP growth-at-all-costs regardless-of-its-environmental-consequences paradigm their regime is currently pursuing at such great cost to society generally and Ghana's base-of-the-pyramid demographic in particular.
Perhaps to enable Ghana achieve all 17 United Nations Sustainable Development Goals (UN SDGs) by 2030, Providence must indeed have made Vice President Bawumia to be suddenly taken ill, so that he would undergo a Damascene conversion - and commit to monetary reform in Ghana along the lines sought by Positive Money UK and the International Movement for Monetary Reform (IMMR) and also commit to empowering Ghana's nascent green economy. Cool.
Perhaps Gabby Asare Otchere-Darko, Bawumia's minder-in-chief in London, who unquestionably (and rightly) seeks a place in the Pantheon of great African leaders for President Akufo-Addo - having now realised that regardless of whatever revisionist propaganda he and his co-conspirators dream up, his forbear Dr. J. B. Danquah, will never qualify for such a place because of his repulsive Akan tribal-supremacist beliefs and for being an agent of Western imperialism and lackey of sundry Western intelligence agencies during his day - should arrange for Dr. Bawumia to be hosted by Positive Money UK and have conversations with some of the advocates for monetary reform in Britain.
It will hopefully enable Bawumia to finally step out of the shadow of conventional economic thinking, and commit to growing Ghana's nascent green economy - instead of the ruinous GDP growth-at-all-costs regardless-of-its-environmental-consequences paradigm their regime is currently pursuing at such great cost to society generally and Ghana's base-of-the-pyramid demographic in particular.
Perhaps to enable Ghana achieve all 17 United Nations Sustainable Development Goals (UN SDGs) by 2030, Providence must indeed have made Vice President Bawumia to be suddenly taken ill, so that he would undergo a Damascene conversion - and commit to monetary reform in Ghana along the lines sought by Positive Money UK and the International Movement for Monetary Reform (IMMR) and also commit to empowering Ghana's nascent green economy. Cool.
Energy Manager Today/Alyssa Danigelis: Developing a Self-Sustaining Microgrid: Q&A with Stone Edge Farm’s Craig Wooster
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Developing a Self-Sustaining Microgrid: Q&A with Stone Edge Farm’s Craig Wooster
January 29, 2018 by Alyssa Danigelis
Stone Edge Farm Microgrid Craig WoosterStone Edge Farm is a 16-acre estate owned by Mac and Leslie McQuown in Sonoma, California, that includes a winery known for producing Cabernet Sauvignon from organically-grown grapes. In 2013, Mac and experienced electrical engineering contractor Craig Wooster embarked on an open-source microgrid project to lower the farm’s carbon footprint.
Since then, the Stone Edge Farm Microgrid has reached a 785-kW capacity that includes solar PV, a microturbine, and a hydrogen fuel cell hive. The system supplies 100% of the farm’s internal load and produces fuel for three hydrogen-powered cars.
In early October 2017, wildfires raged in the area. “We had built a number of use cases for events that might affect the Microgrid, but none covered a fire assault on the Sonoma Valley or our project,” says Craig Wooster, Microgrid project manager and head of the intern program.
Recently we caught up with Wooster to find out about Stone Edge Farm’s energy strategy and how it helped the estate survive a literal trial by fire.
How did the Microgrid get started?
The impetus was the construction of an outdoor kitchen that was to have large electrical loads. Stone Edge Farm had seven service meters and this addition would make eight. I said the last thing we needed was another meter and suggested looking at energy management or perhaps building a microgrid.
What is Stone Edge Farm’s approach to energy?
Mac is a results-oriented person. It actually says in my contract, “Failure is the crucible of success. You must fail to learn. You will not fear failure.” We said early on that we would entertain new technologies. They had to be at proof-of-concept, alpha model or better so that put us in the beta-test mode.
We had successes and failures. Failures fall into two categories. One was complete failure of a given concept. The second was the failure of the companies to be able to go through the process of a startup. For instance, not get a second round of funding. Some of these technologies are before their time.
What key lessons have you been learning from the Microgrid project?
In the beginning, Mac put in place a directive that any system I build, any device I buy must reduce the carbon footprint of Stone Edge Farm. The original goal was 50%. I did that the first year because we solarized everything. Then Mac said, “I want you to see how far below zero you can take it.”
People think of “microgrid” as a collection of wires, switches, control systems. We’re really working in a space of distributed energy generation. You do not have to build an $80 million project. Invest what you can every year, build your system the way you want it, and tune it to your needs.
There are different modes of operation for a microgrid. If the grid fails, you can enter “island mode” and you are self-sustaining. You have energy storage and generators. That could be a generator burning diesel or propane. Or it could be solar panels, wind turbines, batteries, fuel cells, hydrogen devices.
Then there’s the mode the distributed energy industry is struggling with, where your island has more energy capacity stored or in production than you can use internally. Hypothetically you could sell that to the utility.
What did you do at Stone Edge Farm?
We were going after being able to export electrons to the grid. We got a polite letter from our utility telling us that we could not have a connection agreement. We were a little broken-hearted because we have more capacity behind the meter than we could ever use. Parallel with the arrival of this letter, we had started to explore hydrogen.
Hydrogen stores instantly and is usable infinitely, which means you can put it in a bottle and use it today or you can use it a year from now. There is three times more revenue in the kilogram equivalent of the kilowatt. That’s why we talk about hydrogen-based microgrids — H-grids.
What is the business case for hydrogen-based microgrids?
This is California-centric for the moment. The legislature put into effect the Low Carbon Fuel Standard. For every kilogram of hydrogen we produce, we get a state credit for $2.17. This is one of the key vectors to changing the business model.
We turn on our electrolyzer, take that electricity, crack water, and make hydrogen. Once you’ve got hydrogen, you could use it through stationary fuel cells back into your own system. You could sell it to your neighbors in California as long as you don’t cross a road. Third, you could export it out of the side of a building to a truck. There are no bureaucratic entanglements when you look at H-grids. The state has actually stacked the deck in favor of hydrogen production.
Hydrogen is part of the Stone Edge Farm Microgrid. What happened during the wildfire last fall?
On October 8, 2017, I was awakened by a phone call from one of my assistant managers. He told me there was a wildland fire between Highway 29 and Sonoma. I called my son Troy, who lives next door to Stone Edge Farm. He said that power was still on, but it was very smoky and he could see active fire.
I told him I would contact Jorge Elizondo, who works with us and lived about three minutes from the farm, and that the two of them needed to put SEF into island mode. I had Troy shut down the hydrogen electrolysis system.
With no one on campus, our electrical usage dropped. Normally this would not be a problem because we would consume excess power with our hydrogen electrolyzer. But even with the smoke and ash in the air, our solar systems were producing more energy than we could consume. Troy and Jorge shut off some of the solar arrays as the battery system reached saturation charge.
The Microgrid operated for a total of 10 days in island mode. While this was a worry as it was happening, the fact that it worked should not have been a big surprise. A microgrid is designed to be able to operate on its own.
What’s next for the Stone Edge Farm Microgrid?
We have a lot of Enphase Energy inverters in our system. I explained to their technical officers what we observed during the fire with curtailing solar and asked if they could help us come up with a solution. Their smart inverter system will allow us to turn solar panels on and off one at a time, much like the volume on your radio. We are going to be beta testing that in the next few months.
We are adding a great deal of solar to our system. We are in a second review of installing a flywheel in the system. We are looking at a fourth hydrogen car. And we have broken ground on another microgrid called Silver Cloud. We’re not done by any means. Every time we explore something, we find something new.
The Environmental Leader Conference & Energy Manager Summit takes place May 15 – 17, 2018 at the Denver Marriott Tech Center. More information here.
(Visited 173 times, 173 visits today)
Categories Battery, Distributed Energy, Electricity, Energy Efficiency, Energy Management, Energy Storage, Featured, Fuel Cells, Microgrid, Microgrids, On-Site Energy, Renewable Energy, SolarTags California, hydrogen, hydrogen fuel cells, microgrid, microgrids, solar power, Stone Edge Farm, Stone Edge Farm Microgrid, wildfires, wineries
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Developing a Self-Sustaining Microgrid: Q&A with Stone Edge Farm’s Craig Wooster
January 29, 2018 by Alyssa Danigelis
Stone Edge Farm Microgrid Craig WoosterStone Edge Farm is a 16-acre estate owned by Mac and Leslie McQuown in Sonoma, California, that includes a winery known for producing Cabernet Sauvignon from organically-grown grapes. In 2013, Mac and experienced electrical engineering contractor Craig Wooster embarked on an open-source microgrid project to lower the farm’s carbon footprint.
Since then, the Stone Edge Farm Microgrid has reached a 785-kW capacity that includes solar PV, a microturbine, and a hydrogen fuel cell hive. The system supplies 100% of the farm’s internal load and produces fuel for three hydrogen-powered cars.
In early October 2017, wildfires raged in the area. “We had built a number of use cases for events that might affect the Microgrid, but none covered a fire assault on the Sonoma Valley or our project,” says Craig Wooster, Microgrid project manager and head of the intern program.
Recently we caught up with Wooster to find out about Stone Edge Farm’s energy strategy and how it helped the estate survive a literal trial by fire.
How did the Microgrid get started?
The impetus was the construction of an outdoor kitchen that was to have large electrical loads. Stone Edge Farm had seven service meters and this addition would make eight. I said the last thing we needed was another meter and suggested looking at energy management or perhaps building a microgrid.
What is Stone Edge Farm’s approach to energy?
Mac is a results-oriented person. It actually says in my contract, “Failure is the crucible of success. You must fail to learn. You will not fear failure.” We said early on that we would entertain new technologies. They had to be at proof-of-concept, alpha model or better so that put us in the beta-test mode.
We had successes and failures. Failures fall into two categories. One was complete failure of a given concept. The second was the failure of the companies to be able to go through the process of a startup. For instance, not get a second round of funding. Some of these technologies are before their time.
What key lessons have you been learning from the Microgrid project?
In the beginning, Mac put in place a directive that any system I build, any device I buy must reduce the carbon footprint of Stone Edge Farm. The original goal was 50%. I did that the first year because we solarized everything. Then Mac said, “I want you to see how far below zero you can take it.”
People think of “microgrid” as a collection of wires, switches, control systems. We’re really working in a space of distributed energy generation. You do not have to build an $80 million project. Invest what you can every year, build your system the way you want it, and tune it to your needs.
There are different modes of operation for a microgrid. If the grid fails, you can enter “island mode” and you are self-sustaining. You have energy storage and generators. That could be a generator burning diesel or propane. Or it could be solar panels, wind turbines, batteries, fuel cells, hydrogen devices.
Then there’s the mode the distributed energy industry is struggling with, where your island has more energy capacity stored or in production than you can use internally. Hypothetically you could sell that to the utility.
What did you do at Stone Edge Farm?
We were going after being able to export electrons to the grid. We got a polite letter from our utility telling us that we could not have a connection agreement. We were a little broken-hearted because we have more capacity behind the meter than we could ever use. Parallel with the arrival of this letter, we had started to explore hydrogen.
Hydrogen stores instantly and is usable infinitely, which means you can put it in a bottle and use it today or you can use it a year from now. There is three times more revenue in the kilogram equivalent of the kilowatt. That’s why we talk about hydrogen-based microgrids — H-grids.
What is the business case for hydrogen-based microgrids?
This is California-centric for the moment. The legislature put into effect the Low Carbon Fuel Standard. For every kilogram of hydrogen we produce, we get a state credit for $2.17. This is one of the key vectors to changing the business model.
We turn on our electrolyzer, take that electricity, crack water, and make hydrogen. Once you’ve got hydrogen, you could use it through stationary fuel cells back into your own system. You could sell it to your neighbors in California as long as you don’t cross a road. Third, you could export it out of the side of a building to a truck. There are no bureaucratic entanglements when you look at H-grids. The state has actually stacked the deck in favor of hydrogen production.
Hydrogen is part of the Stone Edge Farm Microgrid. What happened during the wildfire last fall?
On October 8, 2017, I was awakened by a phone call from one of my assistant managers. He told me there was a wildland fire between Highway 29 and Sonoma. I called my son Troy, who lives next door to Stone Edge Farm. He said that power was still on, but it was very smoky and he could see active fire.
I told him I would contact Jorge Elizondo, who works with us and lived about three minutes from the farm, and that the two of them needed to put SEF into island mode. I had Troy shut down the hydrogen electrolysis system.
With no one on campus, our electrical usage dropped. Normally this would not be a problem because we would consume excess power with our hydrogen electrolyzer. But even with the smoke and ash in the air, our solar systems were producing more energy than we could consume. Troy and Jorge shut off some of the solar arrays as the battery system reached saturation charge.
The Microgrid operated for a total of 10 days in island mode. While this was a worry as it was happening, the fact that it worked should not have been a big surprise. A microgrid is designed to be able to operate on its own.
What’s next for the Stone Edge Farm Microgrid?
We have a lot of Enphase Energy inverters in our system. I explained to their technical officers what we observed during the fire with curtailing solar and asked if they could help us come up with a solution. Their smart inverter system will allow us to turn solar panels on and off one at a time, much like the volume on your radio. We are going to be beta testing that in the next few months.
We are adding a great deal of solar to our system. We are in a second review of installing a flywheel in the system. We are looking at a fourth hydrogen car. And we have broken ground on another microgrid called Silver Cloud. We’re not done by any means. Every time we explore something, we find something new.
The Environmental Leader Conference & Energy Manager Summit takes place May 15 – 17, 2018 at the Denver Marriott Tech Center. More information here.
(Visited 173 times, 173 visits today)
Categories Battery, Distributed Energy, Electricity, Energy Efficiency, Energy Management, Energy Storage, Featured, Fuel Cells, Microgrid, Microgrids, On-Site Energy, Renewable Energy, SolarTags California, hydrogen, hydrogen fuel cells, microgrid, microgrids, solar power, Stone Edge Farm, Stone Edge Farm Microgrid, wildfires, wineries
Post navigation
Market Research Report: Gensets To Get Even Smarter
Product Announcement: Achieving Dual BREEAM, WELL Certification, Plus a Useful Q&A
5 Reasons To Make the Switch from Scantron
Sponsored By: Progressly
How Tracking/Managing Energy Consumption Drives Real Cost Savings
Sponsored By: Digital Lumens
The Hidden Costs of Air Compressor Operation
Sponsored By: FS-Elliott
EHS Risk Management Guidebook: A Practical How-To Guide
Sponsored By: EtQ
Leave a Comment
NEWSLETTER
NEWSLETTER SIGNUP
Join 100,000+ subscribers who gain a competitive advantage with our news and analysis.
Select the newsletters that interest you: Energy Manager Today Newsletter (Mon, Wed, Fri) Environmental Leader Newsletter (Mon, Wed, Fri)
Leaders Leading
Marty Sedler, Director, Global Utilities and Infrastructure, Sr. PE – Intel Corporation
Upcoming Webinars
Negotiating Energy Contracts – 10 Terms You Need...
Best Practices
Beyond Energy Management
Read More Best Practices
Sponsored By Transformative Wave
FEATURED SUPPLIERS
Anguil Environmental Systems
Progressly
EnerNOC, Inc.
Digital Lumens
FS-Elliott
Call2Recycle, Inc.
EtQ
VelocityEHS
View All Suppliers >
WHITE PAPERS
Achieving Digital Transformation through Operational Excellence
Sponsored By:
Progressly
9 Ways Mobility Enables Companies to Streamline Daily Operations
Sponsored By:
Progressly
Datasheet Track and Manage Field Operations
Sponsored By:
Progressly
Wake Up To The Future of Work Operational Performance Management
Sponsored By:
Progressly
5 Reasons To Make the Switch from Scantron
Sponsored By:
Progressly
6 Things to Consider When Deciding Whether to Build or Buy Software
Sponsored By:
Progressly
How to Unsilo Your EHS Data
Sponsored By:
Progressly
Just the Facts 8 Popular Misconceptions about LEDs Controls
Sponsored By:
Digital Lumens
How TrackingManaging Energy Consumption Drives Real Cost Savings
Sponsored By:
Digital Lumens
Your Guide to the Benefits of Centrifugal Compressors
Sponsored By:
FS-Elliott
View All White Papers >
UPCOMING WEBINARS
ON DEMAND WEBINARS
Negotiating Energy Contracts – 10 Terms You Need to Know
Mexico’s Deregulated Energy Markets: How to Reduce Costs and Protect Budgets
Why Aligning Renewable and Commodity Energy Purchases Makes Strategic Sense
The EHS Manager’s Priorities in 2017: Predict and Prevent
From Isolated to Integrated: How to Eliminate the Redundancies and Inefficiencies of Independent EHS Systems
See More Webinars >
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© Copyright 2018 Energy Manager Today ® is a registered trademark of Business Sector Media LLC.
Energy Manager Today: Beyond Apple and Walmart: 5 Reasons Small(er) Biz Can Gain from Renewable Energy, Too
Energy Manager Today
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Commercial & Industrial Energy Managers
Energy Management Products
Beyond Apple and Walmart: 5 Reasons Small(er) Biz Can Gain from Renewable Energy, Too
January 29, 2018 by Guest Author
While economies of scale used to be a significant demotivator for smaller companies when it came to the affordability and practicality of procuring renewable energy, recent technological and industry advancements in the renewable energy landscape have effectively lowered the barrier to entry for smaller businesses.
In this article, I’ll explain how five recent evolutions in the energy landscape have yielded the most favorable market conditions to date for businesses of all sizes to get started with renewable energy.
Five recent changes in the renewable energy landscape include:
Cheaper Costs
Material cost reduction and labor efficiencies have driven down the cost of solar, and as solar manufacturers have grown, economies of scale have allowed them to lower the cost of manufacturing solar panels even further. Additionally, a variety of other factors have more recently entered the scene and collectively lowered the cost of switching to solar, such as new financing options. While many businesses interested in installing solar panels were thwarted by poor roof quality or not owning their building, today, new financing options and system ownership structures continue to emerge that bundle roof retrofits with solar installation, or further incentivize a building owner to allow long-term tenants to invest in solar. Also, as solar energy continues to grow in mainstream adoption and visibility, overall confidence in solar is boosted, which helps the industry expand and thereby brings down costs.
Advanced Accessibility
Solar installations have become more turnkey, and customers can now turn to a single provider for all their energy needs. Packaging all services under one provider simplifies the process and makes it much more logistically feasible for smaller companies with lean support staff to dip into renewable energy. Furthermore, sustainability is becoming “tables stakes,” and in many industries, solar adoption is so prevalent that companies who have not invested in solar can be at a competitive disadvantage. So as customers increasingly value sustainably-sourced energy, investing in renewable energy is ever more justifiable.
Enhanced Efficacy
A significant limitation for small and medium sized businesses has historically been the amount of space available for the system. However, advancements in design and efficacy have wiped out that barrier. By increasing the efficiency of each panel, the amount of space needed for installation is significantly less restrictive. This allows for closer placement of modules both on rooftop and ground mount systems. Additionally, system tilts are dropping; when solar was more expensive, systems were designed to maximize production per panel, but with more efficient panels, there is less of a need to maximize panel angle.
Increased Integration
Recent advancements also allow for solar integration with other technologies, thereby exponentially enhancing the value of solar investments, and making the upfront costs more manageable for smaller businesses. For instance, companies can seamlessly install electric vehicle chargers simultaneously with solar panels, and thereby cover future EV charging needs with solar energy, while saving on installation costs. Additionally, incorporating batteries into solar projects can offset demand charges, and this option is now more affordable than ever as storage technology costs have recently decreased. Another recent integration tool is advanced data monitoring, which provides richer data and extended access that can provide a broader image of overall energy usage. This can facilitate the identification and prioritization of new savings opportunities. Ultimately, these integrated business additions can serve to enhance the overall benefit of a system for small and medium size companies.
Fully Functional
As solar energy increases in accessibility, efficacy, and integration, more and more creative ways to increase its functionality – beyond just generating power – are also arising. For instance, installing solar panels on top of carports can help offset insurance costs for car dealerships in hail prone areas, while also adding value to customers and employees by providing weather protection and shade. Schools and educational institutions can leverage solar projects for academic enrichment programs and student curriculum. Lastly, rooftop solar projects keep the roof cool, which minimize building cooling costs.
Ultimately, maintaining a big picture perspective is key. Considering the full lifecycle cost and functionality, as well as the potential impact a solar system could have on adjacent areas of your business are core considerations that should not be overlooked. To get started, the first step in the fiscally and environmentally sustainable renewable energy journey is identifying a trusted partner to help address and solve all your energy needs. Working with a partner who can help you manage energy as a service and who will look at the total cost of ownership over the life of the system is crucial.
Be sure you don’t lose out on solar energy while the time is ripe just because of barriers like not owning your building or the project not financially balancing out the last time you considered it, as new financing solutions, more effective designs, and more efficient technologies continue to make solar a strong business investment and increasingly accessible for businesses of all sizes.
Finally, while historically solar energy has been a wiser and more attainable investment for large-scale corporations with a national presence, recent technological and industry advancements have reduced the barriers to entry for small and medium size businesses, making now the perfect time to invest in renewable energy, no matter if you have five or five thousand employees.
This article was contributed by Alan Russo, Senior Vice President REC Solar. More about Alan here.
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Categories Commercial Buildings, Featured, Renewable Energy, Small Business, SolarTags REC Solar, solar, solar integration
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Beyond Apple and Walmart: 5 Reasons Small(er) Biz Can Gain from Renewable Energy, Too
January 29, 2018 by Guest Author
While economies of scale used to be a significant demotivator for smaller companies when it came to the affordability and practicality of procuring renewable energy, recent technological and industry advancements in the renewable energy landscape have effectively lowered the barrier to entry for smaller businesses.
In this article, I’ll explain how five recent evolutions in the energy landscape have yielded the most favorable market conditions to date for businesses of all sizes to get started with renewable energy.
Five recent changes in the renewable energy landscape include:
Cheaper Costs
Material cost reduction and labor efficiencies have driven down the cost of solar, and as solar manufacturers have grown, economies of scale have allowed them to lower the cost of manufacturing solar panels even further. Additionally, a variety of other factors have more recently entered the scene and collectively lowered the cost of switching to solar, such as new financing options. While many businesses interested in installing solar panels were thwarted by poor roof quality or not owning their building, today, new financing options and system ownership structures continue to emerge that bundle roof retrofits with solar installation, or further incentivize a building owner to allow long-term tenants to invest in solar. Also, as solar energy continues to grow in mainstream adoption and visibility, overall confidence in solar is boosted, which helps the industry expand and thereby brings down costs.
Advanced Accessibility
Solar installations have become more turnkey, and customers can now turn to a single provider for all their energy needs. Packaging all services under one provider simplifies the process and makes it much more logistically feasible for smaller companies with lean support staff to dip into renewable energy. Furthermore, sustainability is becoming “tables stakes,” and in many industries, solar adoption is so prevalent that companies who have not invested in solar can be at a competitive disadvantage. So as customers increasingly value sustainably-sourced energy, investing in renewable energy is ever more justifiable.
Enhanced Efficacy
A significant limitation for small and medium sized businesses has historically been the amount of space available for the system. However, advancements in design and efficacy have wiped out that barrier. By increasing the efficiency of each panel, the amount of space needed for installation is significantly less restrictive. This allows for closer placement of modules both on rooftop and ground mount systems. Additionally, system tilts are dropping; when solar was more expensive, systems were designed to maximize production per panel, but with more efficient panels, there is less of a need to maximize panel angle.
Increased Integration
Recent advancements also allow for solar integration with other technologies, thereby exponentially enhancing the value of solar investments, and making the upfront costs more manageable for smaller businesses. For instance, companies can seamlessly install electric vehicle chargers simultaneously with solar panels, and thereby cover future EV charging needs with solar energy, while saving on installation costs. Additionally, incorporating batteries into solar projects can offset demand charges, and this option is now more affordable than ever as storage technology costs have recently decreased. Another recent integration tool is advanced data monitoring, which provides richer data and extended access that can provide a broader image of overall energy usage. This can facilitate the identification and prioritization of new savings opportunities. Ultimately, these integrated business additions can serve to enhance the overall benefit of a system for small and medium size companies.
Fully Functional
As solar energy increases in accessibility, efficacy, and integration, more and more creative ways to increase its functionality – beyond just generating power – are also arising. For instance, installing solar panels on top of carports can help offset insurance costs for car dealerships in hail prone areas, while also adding value to customers and employees by providing weather protection and shade. Schools and educational institutions can leverage solar projects for academic enrichment programs and student curriculum. Lastly, rooftop solar projects keep the roof cool, which minimize building cooling costs.
Ultimately, maintaining a big picture perspective is key. Considering the full lifecycle cost and functionality, as well as the potential impact a solar system could have on adjacent areas of your business are core considerations that should not be overlooked. To get started, the first step in the fiscally and environmentally sustainable renewable energy journey is identifying a trusted partner to help address and solve all your energy needs. Working with a partner who can help you manage energy as a service and who will look at the total cost of ownership over the life of the system is crucial.
Be sure you don’t lose out on solar energy while the time is ripe just because of barriers like not owning your building or the project not financially balancing out the last time you considered it, as new financing solutions, more effective designs, and more efficient technologies continue to make solar a strong business investment and increasingly accessible for businesses of all sizes.
Finally, while historically solar energy has been a wiser and more attainable investment for large-scale corporations with a national presence, recent technological and industry advancements have reduced the barriers to entry for small and medium size businesses, making now the perfect time to invest in renewable energy, no matter if you have five or five thousand employees.
This article was contributed by Alan Russo, Senior Vice President REC Solar. More about Alan here.
(Visited 85 times, 85 visits today)
Categories Commercial Buildings, Featured, Renewable Energy, Small Business, SolarTags REC Solar, solar, solar integration
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McKinsey & Company/Cunningham, Davis, & Dohrmann: The trillion-dollar prize: Plugging government revenue leaks with advanced analytics
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Article - January 2018
The trillion-dollar prize: Plugging government revenue leaks with advanced analytics
By Susan Cunningham, Jonathan Davis, and Thomas Dohrmann
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Few fiscal opportunities are bigger than reducing revenue leakages from tax and payment abuse. Now, new sources of data and new analytics tools are giving governments the upper hand.
Rare is the government today whose fiscal challenges don’t handcuff leaders seeking to provide for the future through investments in infrastructure, education, and healthcare. Often the difference between funded and deferred policy priorities comes down to the perennial and seemingly intractable challenge of revenue lost to tax noncompliance and improper government payments.
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Our analysis suggests that close to 20 percent of government revenues worldwide, or about $5 trillion, go missing each year, either in dollars owed but never paid or in outbound payments gone awry. In this era of growing demands for government services and pressing budget challenges worldwide, few fiscal opportunities loom larger than reducing these leakages (Exhibit 1).
Exhibit 1
Leading practices enabled by data, analytics, and more-proactive approaches to revenue collection could save $1 trillion worldwide.
The good news is that truly game-changing advances in big data and advanced analytics are providing governments with capabilities that would have been difficult to imagine even five years ago. While applying these new capabilities in revenue administration and payments is still a young science, some pioneers are already securing large gains. In one case, a ministry of finance set up a new unit to combine data sets from tax, customs, and business registrations, along with external data from the banking sector, to target fraud and noncompliance. The team quickly integrated new data and analytics to identify suspicious patterns of customs declarations and tax payments. Within a matter of weeks, the unit was testing interventions and plugging revenue gaps that previously would have taken years to uncover. In another example, a finance ministry and a tax authority collaborated on a completely new approach to compliance infused by analytics strategies and identified opportunities to increase total revenue collected by 5 percent over several years.
Overall, our research suggests that in larger, developed economies, these capabilities have the potential to increase total government revenues by 1 to 3 percent. In less-formal, developing economies, the opportunity is much larger, as much as 10 percent or more. To put this number in context, worldwide government deficits are expected to be 2.6 percent of estimated GDP in 2021.1 Improving revenue collections just 1 percent of GDP would eliminate over one-third of the deficit, equipping leaders to make and implement better policy choices.
Unfortunately, a handful of common barriers stymie government efforts. First, we find that very few governments globally have taken the systematic approach necessary to deploy these new capabilities at scale. Second, agencies often lack exposure to and experience with the latest innovations. Third, well-meaning civil servants may resist analytics-driven approaches that may challenge long-held assumptions and practices. Finally, effective use of analytics requires mastery of rapid, small-scale tests that can push the boundaries of traditional organizational agility.
Still, leading governments have realized that the value at stake greatly outweighs these challenges, and there are emerging practices that can be deployed to surmount them. Citizens, increasingly accustomed to businesses’ sophisticated use of data and analytics, will create urgency and expectations of innovation within governments. The increasing pace of innovation will make the gap between followers and innovators more difficult to surmount.
This article explores why governments now have unparalleled opportunities for improving their outcomes in revenue administration and payments, how big the opportunity could be, and what it takes to effectively seize it.
A rapidly changing game
The substantial leakage of government revenues and improper payments is a persistent challenge for governments. However, three trends create a unique and immediate opportunity for governments to mobilize for greater success—the availability of data, the plummeting costs of data and analytics tools and storage, and new techniques for translating analysis into action.
The explosion in available data
Sidebar
Addressing privacy head-on
Data-driven transformations require governments to become much more adept in accessing and analyzing large amounts of data. Successful programs tackle data-privacy concerns (which vary by jurisdiction) through a handful of common best practices, including:
maintaining strict protocols to ensure that data analysis is performed using masked data wherever possible and only those with a need to know can see personally identifying information
creating transparency around how data will be used (for example, by limiting which agencies can use the data for which purposes)
developing streamlined channels for citizens to respond when data that agencies rely on are inaccurate or out-of-date
providing clear public communications on the outcomes achieved through usage of big data so that the public understands that better analysis means improved outcomes with less irritation for those playing by the rules
The rapid digitization of consumer and business life is transforming the way that companies and governments conduct their business. Digitization creates a massive trail of data that can support more-effective revenue and payment programs. There is an emerging consensus globally that governments can and should use this data to reduce revenue leakage, subject to strong privacy constraints prescribed by policy makers. (See sidebar “Addressing privacy head-on.”)
Consider the following examples:
As e-commerce swells and cash becomes less prevalent, tax authorities can unearth businesses that have been “off the radar.” In developed countries, the share of cash transactions by value has tumbled by half in the past decade. Across Sweden, Norway, and Denmark, the share is less than 1 percent (Exhibit 2). More than half of Sweden’s 1,600 bank branches no longer keep cash on hand or take cash deposits.
Exhibit 2
The share of cash payments by value has fallen sharply, in some regions to below 1 percent.
The volume and quality of satellite and other digital imagery brings new opportunities to use geospatial data to address fraud and leakage, such as by identifying suspicious payment addresses and detecting undervalued properties for tax purposes.
Governments themselves have increasingly digitized operations, making previously offline or limited digital data sets much richer and timelier. Examples include data on business ownership, professional licenses, travel records, and police and court records.
Private companies also have significant amounts of data that can inform government administration. For example, power-consumption patterns may indicate a likely presence of a business operation in a home or a larger commercial enterprise than reported.
Cooperation and data sharing among global tax authorities is accelerating, with standardized reporting by and about multinational enterprises and on individual holdings. Examples include the Organisation for Economic Co-operation and Development’s (OECD) Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA).
Newly accessible and affordable tools
Not only are more data available, but it is now significantly faster and cheaper to extract, process, store, and analyze them. This makes it possible to rapidly transform data into insights and to put both data and insights directly in the hands of decision makers.
Legacy processes for ingesting and storing data are being completely transformed by the following:
rapid advances in data assembly and storage capabilities (for example, through cloud technologies, unstructured data lakes, and data warehouses)
an expanding set of tools to manage and manipulate unstructured data such as free text images, sounds, and video
quickly evolving algorithms that can automatically detect patterns across vast sums of complex data (for example, to detect unusual concentrations of payments going to a specific geography, or to uncover hidden links with known fraudsters)
advances in visualization tools that allow analysts to convert algorithms to insights leaders can understand (for example, to explore relationships in the data to better understand why algorithms flagged specific transactions)
Now consider how governments are putting these new tools and data to work to identify large and untapped revenue pools. First, advanced models can predict compliance risks that are overlooked by human judgment. For instance, governments are predicting the likelihood of insolvency and unpaid tax debt based on subtle changes in financial statements or payment behaviors such as timing and method of payment.
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Second, governments can create an outside-in estimate of business revenues and tax liability, which can then be compared to self-reported values, for example, by using data on electronic payments and then estimating how much cash the business should be reporting. An example is using statistical techniques to predict net income based on business type, specific geography, and benchmarks on input costs.
Finally, agencies can detect linkages between seemingly disconnected entities in ways that can reveal fraud. For example, network analysis can detect organized fraud hubs improperly claiming government benefits or identify healthcare claims submitted by providers colluding to commit insurance-reimbursement fraud.
Innovative ways to operationalize analytics insights
Sidebar
Mastering the art of test and learn
The best data-driven organizations run frequent small tests of different potential changes. For instance, Internet marketing tests run hundreds of randomized, controlled A/B trials, showing one of two versions of a message to viewers and comparing the resulting consumer behavior to select the best option.
This agile, test-and-learn approach differs from a traditional “pilot then roll out” approach in the following ways:
Test results drive the rollout. Test results determine whether to proceed at all, with which approach, and for which population. The testing drives the rollout plan, rather than the other way around, as done in traditional pilots.
Technical skill sets power the process. Analytics experts define the decisions being evaluated, design statistically valid samples and control groups, and capture and evaluate test data.
The approach is much more flexible. Testing multiple treatment options may involve varied call scripts and different versions of notices and website journeys—all while tracking the citizens’ responses separately.
Failures are small and opportunities for learning great. An evidenced-based test-and-learn program dramatically reduces the cost and risk of failure, improves overall return on investment, and builds rapid buy-in.
Successes scale quickly. Once interventions have been tested on a small scale, the winning approaches can be rapidly and confidently scaled up, while lackluster approaches can be either abandoned or significantly retooled.
It’s no secret that government agencies and employees tend to be risk-averse, in ways that can stifle innovation. As a result, most agencies make changes in big steps: they deliberate, agree on direction, and immediately roll out the change to all citizens, sometimes after a short operational pilot. With new analytics tools and skills, agencies can control risk and drive rapid improvements by shifting from this “big bang” approach to innovation to a more controlled, iterative “test-and-learn” approach. (See sidebar “Mastering the art of test and learn.”)
For example, one tax authority tackled tax evasion in the small- and medium-size-enterprise sector through a robust test-and-learn program. A vast number of businesses underreporting income were identified through analytics, first by combining data sets across time and agencies and then iterating advanced predictive models to estimate the likely revenues of each business. The agency carefully tested a range of new treatments, both “hard” enforcement actions and “soft” reminders and educational communications, to determine the return on investment of each treatment for each business. The testing included outreach to taxpayers and their advisers and varied the channels used (mail, phone calls, and mobile messages) as well as the messaging and the actions initiated. For example, authorities sent some businesses a request for self-correction, others a request for limited additional information, and some a notice of audit conducted by mail or in person.
Combining advanced analytics with carefully designed randomized control tests can help governments make the most of insights from new data and analytics, while minimizing resource demands and reducing risks. In addition to immediate revenue improvements, this rapid, successful innovation can fuel a hunger for analytics-driven initiatives across the organization. As a result, we see government teams moving away from their previous mind-set of no action holding the lowest risk to safely designing and testing innovative solutions.
A trillion-dollar opportunity for governments
These trends—in data, processing, analytics, and agile operations—have converged to open new pathways to recapture revenue leakages. While specifics will vary by geography, our research reveals substantial revenue opportunity available to governments worldwide.
Government revenue leakages come in many forms. Revenue lost from direct tax leakages alone—the “tax gap”—stubbornly hovers around 5 to 15 percent of tax revenue for developed nations and can be over 60 percent in emerging economies. This represents underreporting and underpayment by individuals and businesses in the formal economy as well as activities in the informal sector that are not visible to tax and customs authorities. It also includes honest mistakes from citizens who are busy trying to provide for their families, run small businesses, and are confused or out-of-date with frequently changing tax policies or requirements.
In addition, improper payments due to fraud, waste, and abuse cost at least 5 percent of total payments. Improper payments can range from the relatively innocuous, such as an individual claiming a tax deduction for ineligible expenses, to the egregious, such as large-scale fraudulent benefit claims. In the United States, the Government Accountability Office estimates that in 2016 the government lost $144 billion, or 4.6 percent of all government payments, to improper payments, with some multibillion-dollar programs reporting over 20 percent in leakage.2
Beyond the estimated $5 trillion of direct costs of revenue leakages worldwide, the indirect costs of this lost government revenue are also large—a significant debt-servicing burden, uncertain and reduced social benefits, lack of investment in infrastructure for the future, inequity, and, in some cases, social and political unrest.
How much revenue can governments recapture with data and analytics? Taking full advantage of the advanced-analytics revolution to reduce revenue leakage is still in its early days, with many countries yet to formally establish programs. Only a handful have a track record of more than five years. Still, our experience in both the private and public sectors suggests that governments can capture about 20 percent of the leakage over several years of concentrated effort. Worldwide, that represents a trillion-dollar opportunity.
The private sector has a longer track record in deploying well-planned analytics transformations including these latest advances. For instance, in the insurance industry, machine-learning algorithms have improved fraud detection in insurance claims, in some cases by as much as 50 percent. In retail, analytics-driven demand forecasting is expected to reduce forecasting errors by 30 to 50 percent, making overall inventory reductions of 20 to 50 percent feasible. In equipment-intensive industries, the explosion of data and associated analytics has enabled entirely new capabilities of predicting when parts will fail, allowing for substantial reductions in downtime for repair.
In addition to helping with fiscal challenges, these advances have the potential to improve citizens’ confidence in government, contribute to greater fairness in the system, and advance government sustainability.
Capturing the analytics opportunity
We believe that the tools and approaches discussed here are broadly accessible. The technology behind the data-and-analytics revolution is sufficiently mature, and successful private- and public-sector use cases abound. The investment in IT, data, and analytics infrastructure is modest compared to the potential revenue gains. Of course, transforming agencies to take full advantage of data and analytics requires a comprehensive strategy and dedicated leadership. But while a full-scale transformation takes time, governments can get started quickly and begin capturing revenue gains immediately.
The age of analytics: Competing in a data driven world The age of analytics: Competing in a data-driven world
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In our experience, we have found seven practical steps that help governments establish a successful analytics program and begin to tap these gains. These steps can help governments achieve rapid momentum and progress, while putting in place measures to prevent typical setbacks and failures. These steps include the following:
Enlist a small team of experts with real-world, relevant expertise to launch the effort. Even large organizations can start with a modest entrepreneurial effort led by individuals with real-world experience applying analytics techniques and a clear understanding of what the end state looks like. Agencies may attract private-sector leaders, often from the financial-services sector or the digital/high-tech community, with an interest in public service. A team of two or three practitioners, supplemented with specialized external expertise as needed, can create substantial momentum, even in organizations with many thousands of employees. One large developed-economy tax authority recruited senior leaders with experience in advanced analytics in credit-card marketing and risk analysis to lead its new analytics and innovation unit.
Pair analytics experts with rising operational leaders, charging both with two-way learning, rapid results, and shared success. Small, cross-functional groups can quickly learn from each other and unlock massive creativity in problem solving. Consider pairing an up-and-comer in the tax authority’s audit function with a seasoned analytics leader, or link an operational leader in an unemployment-benefits agency with a data scientist. Such pairings drive a virtuous cycle of demand, as individuals inside operating units get hooked on new analytics techniques and share their experience with others. At the same time, analytics experts focus more clearly on improving operational results.
Design a portfolio of analytics initiatives that ranks challenges and opportunities for delivering impact. The most successful teams boldly tackle a few truly advanced approaches to solve very large problems and a few smaller, quick wins that serve as confidence builders for the organization. Organizations that fail to design a diverse portfolio end up overweighting highly speculative initiatives that can stall, or they select a large number of smaller initiatives that are difficult to distinguish from “business as usual.”
Commit senior leaders to fully support and provide resources for the analytics transformation, celebrating successes and quickly learning from failures. Recognize that those in a government agency’s rank and file are likely to perceive that they are taking risks by working differently. Leaders should actively engage in the effort from the beginning—for example, hosting kickoff events, personally reaching out to team members to celebrate landmarks and successes, and broadly recognizing team learning. These visible support gestures are critical to building and maintaining enthusiasm. Collaboration between the public and private sectors can also accelerate learning and success.
Deploy agile processes, a nimble technology team, and analytics “sandboxes” to accelerate progress. Launching analytics-driven transformations need not involve large-scale IT programs. A small, nimble technology team can ensure a secure yet flexible environment to enable analytics innovation. With a “sandbox” environment that encourages experimentation, innovation can proceed without creating demands on the systems and platform that run critical day-to-day operations. Often this can greatly accelerate and simplify future IT requirements, saving considerable time and money.
Execute iteratively, moving quickly to improve based on initial findings. Most agencies equate speed with risk. Combining analytics with test-and-learn techniques can eliminate this trade-off, but organizations need a push to operate differently. Governance mechanisms designed for large, multiyear implementation should be tailored for the smaller, faster test-and-learn approach. While the first iterations of this new operating paradigm benefit from substantial senior-leadership time to move analytics-driven innovation forward at pace, subsequent cycles are much more self-sufficient.
Measure and report on progress regularly. It is critically important to pay attention to how the benefits of analytics initiatives are measured and communicated. Progress in detecting fraud and reducing errors can easily be swamped by day-to-day operations and expectations. Having an established baseline for comparing results and clearly communicating progress are important in building support for long-term change and a continuous-improvement program.
Finally, in embarking on such a journey, government leaders may face many naysayers. Critics will cite a variety of hurdles—fear of a big, ongoing IT transformation; “organ rejection” of new approaches by the existing culture; data-privacy concerns; fear of overburdening constituents; and the scarcity of data-science talent. These are legitimate concerns, requiring engaged leadership and regular communication to overcome. In our experience, a modular approach that orients the organization to learn by doing and to take on risks in manageable increments holds the key for success.
For example, one government was eager to use analytics to improve tax compliance but feared the effort might derail the complex technology modernization program already in progress. However, leaders realized that by using secure analytics “sandboxes” and small-scale tests, they could start their analytics program in parallel and accelerate the improvements they sought, while generating buy-in to the new IT system. The result was an on-time IT modernization, with faster adoption and rapid compliance results.
For governments everywhere, the ability to fund policy priorities in an environment of fiscal constraint is only becoming more critical. Fortunately, advances in data analytics offer a rare opportunity for tax and benefit agencies to tap large effective revenue pools that for a long time have been out of reach. For those willing to take the leap, the benefits of improved government finances and citizen service delivery can be dramatic.
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About the author(s)
Susan Cunningham is a senior expert in McKinsey’s Washington, DC, office, where Jonathan Davis is a partner and Thomas Dohrmann is a senior partner.
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Public Sector
Article - January 2018
The trillion-dollar prize: Plugging government revenue leaks with advanced analytics
By Susan Cunningham, Jonathan Davis, and Thomas Dohrmann
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Few fiscal opportunities are bigger than reducing revenue leakages from tax and payment abuse. Now, new sources of data and new analytics tools are giving governments the upper hand.
Rare is the government today whose fiscal challenges don’t handcuff leaders seeking to provide for the future through investments in infrastructure, education, and healthcare. Often the difference between funded and deferred policy priorities comes down to the perennial and seemingly intractable challenge of revenue lost to tax noncompliance and improper government payments.
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Our analysis suggests that close to 20 percent of government revenues worldwide, or about $5 trillion, go missing each year, either in dollars owed but never paid or in outbound payments gone awry. In this era of growing demands for government services and pressing budget challenges worldwide, few fiscal opportunities loom larger than reducing these leakages (Exhibit 1).
Exhibit 1
Leading practices enabled by data, analytics, and more-proactive approaches to revenue collection could save $1 trillion worldwide.
The good news is that truly game-changing advances in big data and advanced analytics are providing governments with capabilities that would have been difficult to imagine even five years ago. While applying these new capabilities in revenue administration and payments is still a young science, some pioneers are already securing large gains. In one case, a ministry of finance set up a new unit to combine data sets from tax, customs, and business registrations, along with external data from the banking sector, to target fraud and noncompliance. The team quickly integrated new data and analytics to identify suspicious patterns of customs declarations and tax payments. Within a matter of weeks, the unit was testing interventions and plugging revenue gaps that previously would have taken years to uncover. In another example, a finance ministry and a tax authority collaborated on a completely new approach to compliance infused by analytics strategies and identified opportunities to increase total revenue collected by 5 percent over several years.
Overall, our research suggests that in larger, developed economies, these capabilities have the potential to increase total government revenues by 1 to 3 percent. In less-formal, developing economies, the opportunity is much larger, as much as 10 percent or more. To put this number in context, worldwide government deficits are expected to be 2.6 percent of estimated GDP in 2021.1 Improving revenue collections just 1 percent of GDP would eliminate over one-third of the deficit, equipping leaders to make and implement better policy choices.
Unfortunately, a handful of common barriers stymie government efforts. First, we find that very few governments globally have taken the systematic approach necessary to deploy these new capabilities at scale. Second, agencies often lack exposure to and experience with the latest innovations. Third, well-meaning civil servants may resist analytics-driven approaches that may challenge long-held assumptions and practices. Finally, effective use of analytics requires mastery of rapid, small-scale tests that can push the boundaries of traditional organizational agility.
Still, leading governments have realized that the value at stake greatly outweighs these challenges, and there are emerging practices that can be deployed to surmount them. Citizens, increasingly accustomed to businesses’ sophisticated use of data and analytics, will create urgency and expectations of innovation within governments. The increasing pace of innovation will make the gap between followers and innovators more difficult to surmount.
This article explores why governments now have unparalleled opportunities for improving their outcomes in revenue administration and payments, how big the opportunity could be, and what it takes to effectively seize it.
A rapidly changing game
The substantial leakage of government revenues and improper payments is a persistent challenge for governments. However, three trends create a unique and immediate opportunity for governments to mobilize for greater success—the availability of data, the plummeting costs of data and analytics tools and storage, and new techniques for translating analysis into action.
The explosion in available data
Sidebar
Addressing privacy head-on
Data-driven transformations require governments to become much more adept in accessing and analyzing large amounts of data. Successful programs tackle data-privacy concerns (which vary by jurisdiction) through a handful of common best practices, including:
maintaining strict protocols to ensure that data analysis is performed using masked data wherever possible and only those with a need to know can see personally identifying information
creating transparency around how data will be used (for example, by limiting which agencies can use the data for which purposes)
developing streamlined channels for citizens to respond when data that agencies rely on are inaccurate or out-of-date
providing clear public communications on the outcomes achieved through usage of big data so that the public understands that better analysis means improved outcomes with less irritation for those playing by the rules
The rapid digitization of consumer and business life is transforming the way that companies and governments conduct their business. Digitization creates a massive trail of data that can support more-effective revenue and payment programs. There is an emerging consensus globally that governments can and should use this data to reduce revenue leakage, subject to strong privacy constraints prescribed by policy makers. (See sidebar “Addressing privacy head-on.”)
Consider the following examples:
As e-commerce swells and cash becomes less prevalent, tax authorities can unearth businesses that have been “off the radar.” In developed countries, the share of cash transactions by value has tumbled by half in the past decade. Across Sweden, Norway, and Denmark, the share is less than 1 percent (Exhibit 2). More than half of Sweden’s 1,600 bank branches no longer keep cash on hand or take cash deposits.
Exhibit 2
The share of cash payments by value has fallen sharply, in some regions to below 1 percent.
The volume and quality of satellite and other digital imagery brings new opportunities to use geospatial data to address fraud and leakage, such as by identifying suspicious payment addresses and detecting undervalued properties for tax purposes.
Governments themselves have increasingly digitized operations, making previously offline or limited digital data sets much richer and timelier. Examples include data on business ownership, professional licenses, travel records, and police and court records.
Private companies also have significant amounts of data that can inform government administration. For example, power-consumption patterns may indicate a likely presence of a business operation in a home or a larger commercial enterprise than reported.
Cooperation and data sharing among global tax authorities is accelerating, with standardized reporting by and about multinational enterprises and on individual holdings. Examples include the Organisation for Economic Co-operation and Development’s (OECD) Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA).
Newly accessible and affordable tools
Not only are more data available, but it is now significantly faster and cheaper to extract, process, store, and analyze them. This makes it possible to rapidly transform data into insights and to put both data and insights directly in the hands of decision makers.
Legacy processes for ingesting and storing data are being completely transformed by the following:
rapid advances in data assembly and storage capabilities (for example, through cloud technologies, unstructured data lakes, and data warehouses)
an expanding set of tools to manage and manipulate unstructured data such as free text images, sounds, and video
quickly evolving algorithms that can automatically detect patterns across vast sums of complex data (for example, to detect unusual concentrations of payments going to a specific geography, or to uncover hidden links with known fraudsters)
advances in visualization tools that allow analysts to convert algorithms to insights leaders can understand (for example, to explore relationships in the data to better understand why algorithms flagged specific transactions)
Now consider how governments are putting these new tools and data to work to identify large and untapped revenue pools. First, advanced models can predict compliance risks that are overlooked by human judgment. For instance, governments are predicting the likelihood of insolvency and unpaid tax debt based on subtle changes in financial statements or payment behaviors such as timing and method of payment.
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Second, governments can create an outside-in estimate of business revenues and tax liability, which can then be compared to self-reported values, for example, by using data on electronic payments and then estimating how much cash the business should be reporting. An example is using statistical techniques to predict net income based on business type, specific geography, and benchmarks on input costs.
Finally, agencies can detect linkages between seemingly disconnected entities in ways that can reveal fraud. For example, network analysis can detect organized fraud hubs improperly claiming government benefits or identify healthcare claims submitted by providers colluding to commit insurance-reimbursement fraud.
Innovative ways to operationalize analytics insights
Sidebar
Mastering the art of test and learn
The best data-driven organizations run frequent small tests of different potential changes. For instance, Internet marketing tests run hundreds of randomized, controlled A/B trials, showing one of two versions of a message to viewers and comparing the resulting consumer behavior to select the best option.
This agile, test-and-learn approach differs from a traditional “pilot then roll out” approach in the following ways:
Test results drive the rollout. Test results determine whether to proceed at all, with which approach, and for which population. The testing drives the rollout plan, rather than the other way around, as done in traditional pilots.
Technical skill sets power the process. Analytics experts define the decisions being evaluated, design statistically valid samples and control groups, and capture and evaluate test data.
The approach is much more flexible. Testing multiple treatment options may involve varied call scripts and different versions of notices and website journeys—all while tracking the citizens’ responses separately.
Failures are small and opportunities for learning great. An evidenced-based test-and-learn program dramatically reduces the cost and risk of failure, improves overall return on investment, and builds rapid buy-in.
Successes scale quickly. Once interventions have been tested on a small scale, the winning approaches can be rapidly and confidently scaled up, while lackluster approaches can be either abandoned or significantly retooled.
It’s no secret that government agencies and employees tend to be risk-averse, in ways that can stifle innovation. As a result, most agencies make changes in big steps: they deliberate, agree on direction, and immediately roll out the change to all citizens, sometimes after a short operational pilot. With new analytics tools and skills, agencies can control risk and drive rapid improvements by shifting from this “big bang” approach to innovation to a more controlled, iterative “test-and-learn” approach. (See sidebar “Mastering the art of test and learn.”)
For example, one tax authority tackled tax evasion in the small- and medium-size-enterprise sector through a robust test-and-learn program. A vast number of businesses underreporting income were identified through analytics, first by combining data sets across time and agencies and then iterating advanced predictive models to estimate the likely revenues of each business. The agency carefully tested a range of new treatments, both “hard” enforcement actions and “soft” reminders and educational communications, to determine the return on investment of each treatment for each business. The testing included outreach to taxpayers and their advisers and varied the channels used (mail, phone calls, and mobile messages) as well as the messaging and the actions initiated. For example, authorities sent some businesses a request for self-correction, others a request for limited additional information, and some a notice of audit conducted by mail or in person.
Combining advanced analytics with carefully designed randomized control tests can help governments make the most of insights from new data and analytics, while minimizing resource demands and reducing risks. In addition to immediate revenue improvements, this rapid, successful innovation can fuel a hunger for analytics-driven initiatives across the organization. As a result, we see government teams moving away from their previous mind-set of no action holding the lowest risk to safely designing and testing innovative solutions.
A trillion-dollar opportunity for governments
These trends—in data, processing, analytics, and agile operations—have converged to open new pathways to recapture revenue leakages. While specifics will vary by geography, our research reveals substantial revenue opportunity available to governments worldwide.
Government revenue leakages come in many forms. Revenue lost from direct tax leakages alone—the “tax gap”—stubbornly hovers around 5 to 15 percent of tax revenue for developed nations and can be over 60 percent in emerging economies. This represents underreporting and underpayment by individuals and businesses in the formal economy as well as activities in the informal sector that are not visible to tax and customs authorities. It also includes honest mistakes from citizens who are busy trying to provide for their families, run small businesses, and are confused or out-of-date with frequently changing tax policies or requirements.
In addition, improper payments due to fraud, waste, and abuse cost at least 5 percent of total payments. Improper payments can range from the relatively innocuous, such as an individual claiming a tax deduction for ineligible expenses, to the egregious, such as large-scale fraudulent benefit claims. In the United States, the Government Accountability Office estimates that in 2016 the government lost $144 billion, or 4.6 percent of all government payments, to improper payments, with some multibillion-dollar programs reporting over 20 percent in leakage.2
Beyond the estimated $5 trillion of direct costs of revenue leakages worldwide, the indirect costs of this lost government revenue are also large—a significant debt-servicing burden, uncertain and reduced social benefits, lack of investment in infrastructure for the future, inequity, and, in some cases, social and political unrest.
How much revenue can governments recapture with data and analytics? Taking full advantage of the advanced-analytics revolution to reduce revenue leakage is still in its early days, with many countries yet to formally establish programs. Only a handful have a track record of more than five years. Still, our experience in both the private and public sectors suggests that governments can capture about 20 percent of the leakage over several years of concentrated effort. Worldwide, that represents a trillion-dollar opportunity.
The private sector has a longer track record in deploying well-planned analytics transformations including these latest advances. For instance, in the insurance industry, machine-learning algorithms have improved fraud detection in insurance claims, in some cases by as much as 50 percent. In retail, analytics-driven demand forecasting is expected to reduce forecasting errors by 30 to 50 percent, making overall inventory reductions of 20 to 50 percent feasible. In equipment-intensive industries, the explosion of data and associated analytics has enabled entirely new capabilities of predicting when parts will fail, allowing for substantial reductions in downtime for repair.
In addition to helping with fiscal challenges, these advances have the potential to improve citizens’ confidence in government, contribute to greater fairness in the system, and advance government sustainability.
Capturing the analytics opportunity
We believe that the tools and approaches discussed here are broadly accessible. The technology behind the data-and-analytics revolution is sufficiently mature, and successful private- and public-sector use cases abound. The investment in IT, data, and analytics infrastructure is modest compared to the potential revenue gains. Of course, transforming agencies to take full advantage of data and analytics requires a comprehensive strategy and dedicated leadership. But while a full-scale transformation takes time, governments can get started quickly and begin capturing revenue gains immediately.
The age of analytics: Competing in a data driven world The age of analytics: Competing in a data-driven world
Read the report
In our experience, we have found seven practical steps that help governments establish a successful analytics program and begin to tap these gains. These steps can help governments achieve rapid momentum and progress, while putting in place measures to prevent typical setbacks and failures. These steps include the following:
Enlist a small team of experts with real-world, relevant expertise to launch the effort. Even large organizations can start with a modest entrepreneurial effort led by individuals with real-world experience applying analytics techniques and a clear understanding of what the end state looks like. Agencies may attract private-sector leaders, often from the financial-services sector or the digital/high-tech community, with an interest in public service. A team of two or three practitioners, supplemented with specialized external expertise as needed, can create substantial momentum, even in organizations with many thousands of employees. One large developed-economy tax authority recruited senior leaders with experience in advanced analytics in credit-card marketing and risk analysis to lead its new analytics and innovation unit.
Pair analytics experts with rising operational leaders, charging both with two-way learning, rapid results, and shared success. Small, cross-functional groups can quickly learn from each other and unlock massive creativity in problem solving. Consider pairing an up-and-comer in the tax authority’s audit function with a seasoned analytics leader, or link an operational leader in an unemployment-benefits agency with a data scientist. Such pairings drive a virtuous cycle of demand, as individuals inside operating units get hooked on new analytics techniques and share their experience with others. At the same time, analytics experts focus more clearly on improving operational results.
Design a portfolio of analytics initiatives that ranks challenges and opportunities for delivering impact. The most successful teams boldly tackle a few truly advanced approaches to solve very large problems and a few smaller, quick wins that serve as confidence builders for the organization. Organizations that fail to design a diverse portfolio end up overweighting highly speculative initiatives that can stall, or they select a large number of smaller initiatives that are difficult to distinguish from “business as usual.”
Commit senior leaders to fully support and provide resources for the analytics transformation, celebrating successes and quickly learning from failures. Recognize that those in a government agency’s rank and file are likely to perceive that they are taking risks by working differently. Leaders should actively engage in the effort from the beginning—for example, hosting kickoff events, personally reaching out to team members to celebrate landmarks and successes, and broadly recognizing team learning. These visible support gestures are critical to building and maintaining enthusiasm. Collaboration between the public and private sectors can also accelerate learning and success.
Deploy agile processes, a nimble technology team, and analytics “sandboxes” to accelerate progress. Launching analytics-driven transformations need not involve large-scale IT programs. A small, nimble technology team can ensure a secure yet flexible environment to enable analytics innovation. With a “sandbox” environment that encourages experimentation, innovation can proceed without creating demands on the systems and platform that run critical day-to-day operations. Often this can greatly accelerate and simplify future IT requirements, saving considerable time and money.
Execute iteratively, moving quickly to improve based on initial findings. Most agencies equate speed with risk. Combining analytics with test-and-learn techniques can eliminate this trade-off, but organizations need a push to operate differently. Governance mechanisms designed for large, multiyear implementation should be tailored for the smaller, faster test-and-learn approach. While the first iterations of this new operating paradigm benefit from substantial senior-leadership time to move analytics-driven innovation forward at pace, subsequent cycles are much more self-sufficient.
Measure and report on progress regularly. It is critically important to pay attention to how the benefits of analytics initiatives are measured and communicated. Progress in detecting fraud and reducing errors can easily be swamped by day-to-day operations and expectations. Having an established baseline for comparing results and clearly communicating progress are important in building support for long-term change and a continuous-improvement program.
Finally, in embarking on such a journey, government leaders may face many naysayers. Critics will cite a variety of hurdles—fear of a big, ongoing IT transformation; “organ rejection” of new approaches by the existing culture; data-privacy concerns; fear of overburdening constituents; and the scarcity of data-science talent. These are legitimate concerns, requiring engaged leadership and regular communication to overcome. In our experience, a modular approach that orients the organization to learn by doing and to take on risks in manageable increments holds the key for success.
For example, one government was eager to use analytics to improve tax compliance but feared the effort might derail the complex technology modernization program already in progress. However, leaders realized that by using secure analytics “sandboxes” and small-scale tests, they could start their analytics program in parallel and accelerate the improvements they sought, while generating buy-in to the new IT system. The result was an on-time IT modernization, with faster adoption and rapid compliance results.
For governments everywhere, the ability to fund policy priorities in an environment of fiscal constraint is only becoming more critical. Fortunately, advances in data analytics offer a rare opportunity for tax and benefit agencies to tap large effective revenue pools that for a long time have been out of reach. For those willing to take the leap, the benefits of improved government finances and citizen service delivery can be dramatic.
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About the author(s)
Susan Cunningham is a senior expert in McKinsey’s Washington, DC, office, where Jonathan Davis is a partner and Thomas Dohrmann is a senior partner.
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October 2016 – Does your data have a purpose? If not, you’re spinning your wheels. Here’s how to discover one and then translate it into action.
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Dr. Mercola: Steer Clear of This Fashion Trap, No Matter How Alluring It Seems
Care What You Wear — Fixing Fast Fashion
January 30, 2018 • 5,562 views Edition: English
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care what you wear
Story at-a-glance
Estimates suggest the fashion industry is the fifth-most polluting industry in the world
The newly released report, “A New Textiles Economy: Redesigning Fashion’s Future,” created by the Circular Fibres Initiative, presents a new model for the clothing industry that would reduce its negative impact
Between 2000 and 2015, clothing sales doubled, from 50 billion units to 100 billion. As a result, the average number of times a garment is worn before being discarded significantly dropped, creating vastly more textile waste
Estimates suggest more than half of all clothing purchases are discarded in less than a year. Landfills burn the equivalent of one garbage truck full of garments each and every second
GOTS certification is the platinum standard for organic, sustainable textiles. A GOTS certified textile is tracked through every single step of the process, from farm to packaging
By Dr. Mercola
In recent years, the true cost of cheap clothing and so-called “fast fashion” has become better understood, and with that knowledge, a call to change is being sounded. Investigations reveal the clothing industry is a significant source of environmental pollution — according to some estimates it’s the fifth-most polluting industry in the world1 — and excessive consumption only adds to these problems.
So, while in the past the fashion industry has largely skated below the radar, environmentalists and environmentally-minded industry insiders alike are now starting to really hone in on these problems. As noted by the Ellen Macarthur Foundation:2
“The time has come to transition to a textile system that delivers better economic, societal, and environmental outcomes. The report ‘A new textiles economy: Redesigning fashion’s future’ outlines a vision and sets out ambitions and actions — based on the principles of a circular economy — to design out negative impacts and capture a USD 500 billion economic opportunity by truly transforming the way clothes are designed, sold, and used.”
In the past, I had not really given much thought to the clothes I’m wearing, and was shocked to learn about the health and environmental damage occurring from “fast fashion.” I’ve now dedicated myself to wearing and supporting a responsible and regenerative movement to “Care What You Wear,” by developing the Dirt Shirt — organic clothing grown and sewn in the USA — and SITO; organic clothing produced responsibly outside the U.S.
This year, give some serious thought to cleaning up your wardrobe. Remember, being a conscious consumer does not stop at food and household products. Your clothing can be a source of hazardous chemicals, and cheaply made fast fashion items take a tremendous toll on the environment and the people working in the industry. As a consumer, your choices will help guide the garment industry toward more humane and environmentally sane manufacturing processes.
Clothing Sales Are at an All-Time High
According to the featured report, created by the Ellen Macarthur Foundation’s recently launched Circular Fibres Initiative,3,4 while sales of clothing are at an all-time high, utilization of clothing has dramatically diminished, which makes sense considering you can only wear so many items in a year. Most of us also have maybe a handful of items we really like and end up wearing repeatedly.
Between 2000 and 2015, clothing sales soared, doubling from 50 billion units to 100 billion. As a result, the average number of times a garment is worn before being discarded significantly dropped. As noted in the featured article, “steady production growth is intrinsically linked to a decline in utilization per item, leading to an incredible amount of waste.”
Estimates suggest more than half of all clothing purchases are discarded in less than a year. As crazy as it may sound, one British fashion company reminds its customers that a dress will only remain in a woman’s wardrobe for five weeks!5 As noted by Lucy Siegle, who made that stunning observation,6 “The way we get dressed now has virtually nothing in common with the behavior of previous generations, for whom one garment could be worn for decades.”
The result of treating clothing as single-wear disposables is a rapidly growing waste problem that is tough to remedy. Landfills burn the equivalent of one garbage truck full of garments each and every second, and since fabrics are typically dyed and/or treated with toxic chemicals, it’s all essentially toxic waste. Less than 1 percent of discarded textiles are recycled and reused. Growing chemical and plastic pollution is yet another side effect of fast fashion.
“The use of substances of concern in textile production has an important impact on farmers’ and factory workers’ health as well as on the surrounding environment. During use, it has been recently estimated that, half a million tons of plastic microfibers shed during washing ends up in the ocean and ultimately enters the food chain …” the foundation notes.
Source: Ellen Macarthur Foundation
Introducing a New Textile Economy
To address these downsides, the featured report presents a new form of textile economy in which textiles “re-enter the economy after use and never end up as waste.” The four cornerstones of this new economy involve:
Phasing out toxic substances used in textile production and redesigning materials to prevent shedding of microfibers
Changing the way clothing is designed, marketed and used to move away from disposable fashion
Improving textile recycling
Transitioning to renewable inputs to prevent the waste of nonrenewable resources
Source: Ellen Macarthur Foundation
Fashion designer Stella McCartney, who cohosted the launch of the report, said:
“What really excites me about ‘A new textiles economy: Redesigning fashion’s future’ is that it provides solutions to an industry that is incredibly wasteful and harmful to the environment. The report presents a roadmap for us to create better businesses and a better environment. It opens up the conversation that will allow us to find a way to work together to better our industry, for the future of fashion and for the future of the planet.”
The Care What You Wear Campaign
Indeed, we simply must begin to care about what goes into the clothes we wear, which is why I’m participating and donating proceeds from my Dirt Shirts — made from GOTS certified 100 percent organic cotton, sustainably grown in Texas — to the Care What You Wear campaign.
To learn more about this project, check out dirtshirt.org and changingclothes.org. Gone are the days when fashion was all about looking good. Today, there’s a real movement toward fashion that also does good in and for the world. As explained by Marci Zaroff, founder of the first organically certified textile mill in the U.S.:
“It’s not that different from the Farm to Table Movement, where people are saying, ‘Where is my food coming from? How is it being grown and produced?’… We’re waking up to our source inside. We’re awakening to that desire to know what we’re putting in and on our bodies as an extension of ourselves. It’s not just what you eat. It’s also what you wear that is a part of you. We need to be thinking about fiber no differently than we are about food.”
The upshot of this is that responsibly made clothing, made with nontoxic dyes (or no dyes) and organic materials, also feel great. There’s a real difference in quality, and when a piece of clothing is of superb quality, the urge to toss it after a few wears is greatly diminished. In fact, high-quality items often get better with use, opposed to turning into a misshapen, discolored, ill-fitting, worn-out mess after a few washes.
The Problem With Leather
Other designers and textile scientists are approaching the fashion industry’s problems from another angle, creating fabrics that don’t involve conventional fibers like cotton, hemp or synthetics at all. In a recent article for Hakai Magazine,7 Heather Pringle and Amorina Kingdon discuss a number of novel industry ideas, such as lab grown collagen and kombucha leather — developments spawned by growing awareness of the devastating impact leather has on the environment and workers’ health.
“In the United States alone, consumers spend nearly US $30 billion annually on footwear, and that figure doesn’t include what families dish out each year for many other leather goods, including handbags, gloves, and jackets …” Pringle and Kingdon write.
“Between 2012 and 2014 alone, the world’s manufacturers produced nearly 1.8 billion square meters of lightweight leather … for the fashion industry … Much of this fine leather came from small tanneries in developing countries, where labor costs are rock bottom, and environmental and workplace health regulations are often poorly enforced.”
The Leather Industry Poisons Waterways
The environmental cost of our love affair with leather goods is steep. As just one example, in Bangladesh, no less than 200 tanneries were crammed together in Dhaka’s industrial quarter, where toxic, acid-based chemicals flowed freely into the Buriganga River. Each year, an estimated 22,000 cubic liters of toxic effluent have entered the river, which flows into the Bay of Bengal.
Not surprisingly, the tanning industry has killed all life in the Buriganga River, and its waters now threaten the health of anyone entering into it. Heavy metal pollution is also reported along the shores of eastern Bangladesh, more than 200 kilometers away.
In an effort to address the environmental devastation taking place, the Bangladeshi government moved Dhaka’s leather industry to a new site next to the Dhaleshwari River earlier this year, promising this new site would be equipped with a proper water treatment plant. Alas, plans to open the plant were delayed, and now residents fear the leather factories will contaminate the Dhaleshwari River as well.
Novel Leather Alternatives
Unfortunately, eco-friendly leather is hard to come by. Polyurethane and polyvinyl chloride (PVC or “pleather”) are poor alternatives as both are toxic in their own right. Sure, no animals are killed, but workers making these faux “vegan” leathers are exposed to carcinogenic chemicals, and when discarded, they leach toxic dioxins into the environment.
Scientists at Modern Meadow in New Jersey are now working on biofabricated leather made from lab grown collagen. Meanwhile, Australian researchers are experimenting with a leather-like textile made from kombucha ferment. While far from being ready for the fashion industry, these early trials show that “if there’s a will, there’s a way” to come up with alternatives.
When Shopping for Organic Clothing, Make Sure It’s GOTS Certified
Keep in mind that just because you have a textile that someone tells you is organic doesn’t mean it’s an organic textile. A GOTS certified textile, on the other hand, is tracked through every single step of the process, from farm to packaging. Even hang tags have to comply with recycling standards. In other words, for a textile to be certified GOTS, each and every step of the supply chain must be certified to GOTS standards, not just one or two of the steps.
The organic clothing industry is still rather small, and it’s not always easy to find sustainably grown organic clothing. Dirt Shirt will eventually expand to provide GOTS certified underwear and other types of clothing, in addition to T-shirts. At present, I’ve chosen to carry SITO (Soil Integrity for Textiles Organically) brand socks and underwear, as SITO supports our global mission for improving fabric production and putting an end to fast fashion. To learn more about our Dirt Shirt and SITO brand products, see the video below.
The brand PACT also makes GOTS certified organic underwear. Other clothing companies offering organic garments include prAna and Patagonia, Outerknown and Eileen Fisher and smaller brands like Zady, Bead and Reel, Shop Ethica, and Modavanti.
Fortunately, at this point in the game, there’s every reason to believe the sustainable clothing trend will continue to grow, and as people start voting with their dollars, more and more companies will get onboard. It’s important, though, to avoid the mistakes made in the organic food industry, where weak or lacking standards have created what can be best described as a fake organic industry.
The key is to drive certifications with strong organic standards, to keep companies from cutting corners for profit. At present, GOTS certification is the platinum standard to look for.
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Monday, 29 January 2018
[NASA HQ News] NASA Television to Air Live Coverage of Upcoming Rare Lunar Eclipse
January 29, 2018
MEDIA ADVISORY M18-020
NASA Television to Air Live Coverage of Upcoming Rare Lunar Eclipse
Sky-gazers are in for a rare treat Wednesday, Jan. 31, when three celestial events combine to create a super blue blood moon. NASA Television and the agency’s website will provide live coverage of the celestial spectacle beginning at 5:30 a.m. EST.
Weather permitting, the broadcast will feature views from the varying vantage points of telescopes at NASA’s Armstrong Flight Research Center in Edwards, California; Griffith Observatory in Los Angeles; and the University of Arizona’s Mt. Lemmon SkyCenter Observatory.
This event offers a rare opportunity to see a supermoon, a blue moon and a lunar eclipse at the same time. A supermoon occurs when the Moon is closer to Earth in its orbit and appears about 14 percent brighter than usual. As the second full moon of the month, this moon is also commonly known as a blue moon, though it will not be blue in appearance. The super blue moon will pass through Earth’s shadow and take on a reddish tint, known as a blood moon.
A total lunar eclipse occurs when the Sun, Earth, and a full moon form a near-perfect lineup in space. The total phase of the eclipse will last 1 hour and 16 minutes. The whole process will take more than four hours.
If skies are clear, the U.S. West Coast, Alaska and Hawaii will have the best view of totality, from start to finish. For the eastern U.S. and Canada, a clear view will be limited as the Moon sets and the Sun rises during the early stages of the eclipse.
The last total lunar eclipse occurred Sept. 27-28, 2015. The next total lunar eclipse visible across North America will occur Jan. 21, 2019.
The Jan. 31 eclipse is the third in a series of supermoons in December 2017 and January 2018. Watch the Supermoon Trilogy video.
Follow the event online at:
https://moon.nasa.gov
Join the conversation on Twitter at:
https://twitter.com/NASAMoon
-end-
[NASA HQ News] NASA Invites Media to Upcoming NOAA GOES-S Satellite Launch
January 29, 2018
MEDIA ADVISORY M18-019
NASA Invites Media to Upcoming NOAA GOES-S Satellite Launch
Geostationary Operational Environmental Satellite-S (GOES-S)
This illustration depicts NOAA’s Geostationary Operational Environmental Satellite-S (GOES-S), which is scheduled to launch March 1 from Cape Canaveral Air Force Station in Florida. NASA oversees the acquisition of the spacecraft, instruments and launch vehicles for the GOES-R Series program.
Credits: Lockheed Martin
Media accreditation is open for the launch Thursday, March 1, of the second in the National Oceanic and Atmospheric Administration’s (NOAA’s) series of next-generation geostationary weather satellites.
NOAA’s Geostationary Operational Environmental Satellite-S (GOES-S) is scheduled to launch at 5:02 p.m. EST on a United Launch Alliance Atlas V rocket from Cape Canaveral Air Force Station (CCAFS) in Florida. GOES-S is the second in the GOES-R Series of weather satellites that includes GOES-R (now GOES-16), -S, -T and -U.
Media prelaunch and launch activities will take place at CCAFS and NASA’s neighboring Kennedy Space Center. International media without U.S. citizenship must apply by 4:30 p.m.Tuesday, Feb. 13, for access to Kennedy media activities only. U.S. media must apply by 4:30 p.m. Monday, Feb. 19. All media accreditation requests should be submitted online at:
https://media.ksc.nasa.gov/
For questions about accreditation, please email ksc-media-accreditat@mail.nasa.gov. For other questions, or additional information, contact Kennedy’s newsroom at 321-867-2468.
GOES-S will be renamed GOES-17 when it reaches geostationary orbit. Once the satellite is declared operational late this year, it will occupy NOAA’s GOES-West position and provide faster, more accurate data for tracking wildfires, tropical cyclones, fog and other storm systems and hazards that threaten the western United States, Hawaii, Alaska, Mexico, Central America and part of South America.
NOAA manages the GOES-R Series program through an integrated NOAA/NASA office and oversees the acquisition of the program ground system. NASA oversees the acquisition of the spacecraft, instruments and launch vehicles. Lockheed Martin Space of Littleton, Colorado, built the spacecraft and is responsible for spacecraft development, integration and testing.
Mission operations will be performed by NOAA at the NOAA Satellite Operations Facility in Suitland, Maryland. Harris Corp. of Melbourne, Florida, provided the main instrument payload, the Advanced Baseline Imager, and the ground system, which includes the antenna system for data receipt. NASA’s Launch Services Program is responsible for launch management. United Launch Alliance of Centennial, Colorado, is the provider of the Atlas V launch service.
-end-
MEDIA ADVISORY M18-019
NASA Invites Media to Upcoming NOAA GOES-S Satellite Launch
Geostationary Operational Environmental Satellite-S (GOES-S)
This illustration depicts NOAA’s Geostationary Operational Environmental Satellite-S (GOES-S), which is scheduled to launch March 1 from Cape Canaveral Air Force Station in Florida. NASA oversees the acquisition of the spacecraft, instruments and launch vehicles for the GOES-R Series program.
Credits: Lockheed Martin
Media accreditation is open for the launch Thursday, March 1, of the second in the National Oceanic and Atmospheric Administration’s (NOAA’s) series of next-generation geostationary weather satellites.
NOAA’s Geostationary Operational Environmental Satellite-S (GOES-S) is scheduled to launch at 5:02 p.m. EST on a United Launch Alliance Atlas V rocket from Cape Canaveral Air Force Station (CCAFS) in Florida. GOES-S is the second in the GOES-R Series of weather satellites that includes GOES-R (now GOES-16), -S, -T and -U.
Media prelaunch and launch activities will take place at CCAFS and NASA’s neighboring Kennedy Space Center. International media without U.S. citizenship must apply by 4:30 p.m.Tuesday, Feb. 13, for access to Kennedy media activities only. U.S. media must apply by 4:30 p.m. Monday, Feb. 19. All media accreditation requests should be submitted online at:
https://media.ksc.nasa.gov/
For questions about accreditation, please email ksc-media-accreditat@mail.nasa.gov. For other questions, or additional information, contact Kennedy’s newsroom at 321-867-2468.
GOES-S will be renamed GOES-17 when it reaches geostationary orbit. Once the satellite is declared operational late this year, it will occupy NOAA’s GOES-West position and provide faster, more accurate data for tracking wildfires, tropical cyclones, fog and other storm systems and hazards that threaten the western United States, Hawaii, Alaska, Mexico, Central America and part of South America.
NOAA manages the GOES-R Series program through an integrated NOAA/NASA office and oversees the acquisition of the program ground system. NASA oversees the acquisition of the spacecraft, instruments and launch vehicles. Lockheed Martin Space of Littleton, Colorado, built the spacecraft and is responsible for spacecraft development, integration and testing.
Mission operations will be performed by NOAA at the NOAA Satellite Operations Facility in Suitland, Maryland. Harris Corp. of Melbourne, Florida, provided the main instrument payload, the Advanced Baseline Imager, and the ground system, which includes the antenna system for data receipt. NASA’s Launch Services Program is responsible for launch management. United Launch Alliance of Centennial, Colorado, is the provider of the Atlas V launch service.
-end-
Fast Company/Lydia Dishman: Tesla Recruiter Shares Six Strategies To Land A Job At The Company
Fast Company
01.29.189:00 am
Tesla Recruiter Shares Six Strategies To Land A Job At The Company
Nearly half a million people applied to work at Tesla last year, so we asked company experts for tips on standing out.
Tesla Recruiter Shares Six Strategies To Land A Job At The Company
[Photo: courtesy of Tesla]
By Lydia Dishman 5 minute Read
When job openings range from developing technology for electric vehicles to creating roof shingles made for solar power, from selling energy-storing batteries to building rockets to reach Mars, the world-changing potential of the work is obvious. So it’s no wonder people clamor to work at Tesla, a global organization that boasts a staff of around 30,000.
advertisement
The company’s culture, once described by Tesla’s former CFO, Deepak Ahuja, as a “non-stop adrenaline rush,” has come under scrutiny in the past year for layoffs and allegations of harassment and discrimination.
But this hasn’t dampened the enthusiasm of the job-seeking public. Tesla took the No. 6 spot on LinkedIn’s recent ranking of the hottest companies to work for based on job application numbers, the number of professionals who viewed a company’s career page, and the amount of time people remained employed at each company. And aspiring careerists among Gen Z also put the company in the top 25 places they hoped to work someday, according to a poll by the National Society of High School Scholars.
As a result of this, Tesla received just shy of 500,000 resumes and applications for open jobs in 2017. That’s twice what it was in 2016, For perspective, there were only about 2,500 open positions at Tesla back in May and a little over 1,600 now. And not all require coding skills. Job titles range from engineer to electrician, roofer to real estate reassignment agent, technical writer to customer experience rep.
It’s not simple to snag a spot on Tesla’s staff, but there is one thing all hires have in common. “We attract people who believe in what we are doing,” says Gaby Toledano, Tesla’s chief people officer, because “we are mission driven,” she explains, “and we’re making history.”
Just Apply
The sheer number of applicants shouldn’t daunt a hopeful. As Cindy Nicola, Tesla’s vice president of global recruiting, advises, “Everyone should just apply.” The reason is twofold, she explains. One is that the company values diversity, says Nicola. “Not just visible diversity,” she maintains, “but cognitive diversity.”
Nicola says it’s important to have a variety of different kinds of thinkers, because the company is doing things that have never been done before, and a lot is done in-house, so there are plenty of niche jobs. And that’s why it’s okay to come from a nontraditional background. “Some [people] have never done the job before we hired them,” she says, but they have demonstrated that they have a track record of success in whatever they were doing before they came to Tesla. “We are looking for excellence,” she maintains, and people who can come in and make an impact right away.
advertisement
Related: This Former Tesla Recruiter’s Most Revealing Interview Question
No Formula
Tesla’s founder and CEO Elon Musk is famous for his “first principles” thinking that means instead of figuring things out based on what’s happened before, “you boil things down to the most fundamental truths . . . and then reason up from there.” This is the thinking behind every product, policy, and procedure at Tesla. In other words, says Nicola, “we don’t have a formula.” That goes for recruiting, and the entire candidate vetting process driven by the individual and the open position. She says the resume screening process isn’t automated; each one is reviewed by a human.
Be Comfortable On The Spot
Candidates should expect to do online assessments that “allow us to get information about people in creative ways.” Job seekers vying for a factory role may be asked to assemble something in front of a recruiter to show that they can follow directions. Engineering and other tech-based jobs will require some demonstration of skills at a whiteboard. Nicola says coding exercises like this could happen in a group.
“We are looking for how they think,” she underscores. “There is no right answer if it’s never been done before.” She adds, “They have to be comfortable with ambiguity, and if they don’t have an answer, not to get flustered.” Nicola says they prep candidates before taking other steps in the process. “We try to set a tone that’s friendly and warm,” she says, and to make candidates understand they’ll not be judged badly if they’re nervous.
Demonstrate Potential
If you’re a self-taught coder or someone who didn’t attend a top-tier university, fear not. “We are going to look at potential,” says Nicola. How best to demonstrate this? For the candidate who came from a family that didn’t have a lot of money, it can be as simple as pointing out how they held down two jobs to help support themselves and their family. “We are looking for people with grit,” she says.
Show Off The Soft Skills
Toledano says that Tesla measures excellent candidates for three traits: being innovative, driven, and team players. She echoes Nicola by describing an employee who can be comfortable with ambiguity and has an ability to solve tough problems. Additionally, she says, Tesla is looking for people who are willing to experiment, test, and learn. “Failure is okay,” she says, but fail fast and be flexible and adaptable. “We talk to candidates who have never built a car when we put them in a job to help us design and build a car,” Toledano explains. “They’re builders, they’re curious, and problem solvers.”
advertisement
For younger candidates, it may seem like there’s no way to show off soft skills when you’ve only got a short work history. Nicola says, “This is where the extracurricular section of your resume can really pay off.” Sharing what you love to do outside of work provides a small glimpse of who you are as a person, including interning or working full-time while going to school, or that you’ve been recognized for leadership or volunteerism. “We have candidates who participate in Formula SAE, solar club or coding competitions, serve on boards, have written white papers, or are involved in sports or other things that show that the person is well-rounded, passionate, and a team player,” she explains.
Do Your Homework
Nicola says that a standout candidate will have done their homework ahead of the interview. “Not just on Tesla or Elon [Musk], which is some of the sexy stuff,” she says, “but on the problems we are trying to solve.” For instance, she says someone gunning for a sales position at any level should make sure they’ve gone into a Tesla store and can discuss their impression of the customer’s journey and how they might improve it.
She also points out that it is critical that a candidate also demonstrates that they are taking the interview process as an opportunity to assess whether working at Tesla is a good fit for them, too. “The marriage has to work the first time,” she quips. “If they are not in love with the mission, in the end, it can be problematic.” Ditto for being driven, which can be interpreted as someone who thrives in a culture where work takes top priority. Essentially, she says, “We want people to have a good answer [when we ask] ‘Why Tesla?'”
About the author
Lydia Dishman is a reporter writing about the intersection of tech, leadership, and innovation. She is a regular contributor to Fast Company and has written for CBS Moneywatch, Fortune, The Guardian, Popular Science, and the New York Times, among others.
More
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Receive special Fast Company offers.
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01.29.189:00 am
Tesla Recruiter Shares Six Strategies To Land A Job At The Company
Nearly half a million people applied to work at Tesla last year, so we asked company experts for tips on standing out.
Tesla Recruiter Shares Six Strategies To Land A Job At The Company
[Photo: courtesy of Tesla]
By Lydia Dishman 5 minute Read
When job openings range from developing technology for electric vehicles to creating roof shingles made for solar power, from selling energy-storing batteries to building rockets to reach Mars, the world-changing potential of the work is obvious. So it’s no wonder people clamor to work at Tesla, a global organization that boasts a staff of around 30,000.
advertisement
The company’s culture, once described by Tesla’s former CFO, Deepak Ahuja, as a “non-stop adrenaline rush,” has come under scrutiny in the past year for layoffs and allegations of harassment and discrimination.
But this hasn’t dampened the enthusiasm of the job-seeking public. Tesla took the No. 6 spot on LinkedIn’s recent ranking of the hottest companies to work for based on job application numbers, the number of professionals who viewed a company’s career page, and the amount of time people remained employed at each company. And aspiring careerists among Gen Z also put the company in the top 25 places they hoped to work someday, according to a poll by the National Society of High School Scholars.
As a result of this, Tesla received just shy of 500,000 resumes and applications for open jobs in 2017. That’s twice what it was in 2016, For perspective, there were only about 2,500 open positions at Tesla back in May and a little over 1,600 now. And not all require coding skills. Job titles range from engineer to electrician, roofer to real estate reassignment agent, technical writer to customer experience rep.
It’s not simple to snag a spot on Tesla’s staff, but there is one thing all hires have in common. “We attract people who believe in what we are doing,” says Gaby Toledano, Tesla’s chief people officer, because “we are mission driven,” she explains, “and we’re making history.”
Just Apply
The sheer number of applicants shouldn’t daunt a hopeful. As Cindy Nicola, Tesla’s vice president of global recruiting, advises, “Everyone should just apply.” The reason is twofold, she explains. One is that the company values diversity, says Nicola. “Not just visible diversity,” she maintains, “but cognitive diversity.”
Nicola says it’s important to have a variety of different kinds of thinkers, because the company is doing things that have never been done before, and a lot is done in-house, so there are plenty of niche jobs. And that’s why it’s okay to come from a nontraditional background. “Some [people] have never done the job before we hired them,” she says, but they have demonstrated that they have a track record of success in whatever they were doing before they came to Tesla. “We are looking for excellence,” she maintains, and people who can come in and make an impact right away.
advertisement
Related: This Former Tesla Recruiter’s Most Revealing Interview Question
No Formula
Tesla’s founder and CEO Elon Musk is famous for his “first principles” thinking that means instead of figuring things out based on what’s happened before, “you boil things down to the most fundamental truths . . . and then reason up from there.” This is the thinking behind every product, policy, and procedure at Tesla. In other words, says Nicola, “we don’t have a formula.” That goes for recruiting, and the entire candidate vetting process driven by the individual and the open position. She says the resume screening process isn’t automated; each one is reviewed by a human.
Be Comfortable On The Spot
Candidates should expect to do online assessments that “allow us to get information about people in creative ways.” Job seekers vying for a factory role may be asked to assemble something in front of a recruiter to show that they can follow directions. Engineering and other tech-based jobs will require some demonstration of skills at a whiteboard. Nicola says coding exercises like this could happen in a group.
“We are looking for how they think,” she underscores. “There is no right answer if it’s never been done before.” She adds, “They have to be comfortable with ambiguity, and if they don’t have an answer, not to get flustered.” Nicola says they prep candidates before taking other steps in the process. “We try to set a tone that’s friendly and warm,” she says, and to make candidates understand they’ll not be judged badly if they’re nervous.
Demonstrate Potential
If you’re a self-taught coder or someone who didn’t attend a top-tier university, fear not. “We are going to look at potential,” says Nicola. How best to demonstrate this? For the candidate who came from a family that didn’t have a lot of money, it can be as simple as pointing out how they held down two jobs to help support themselves and their family. “We are looking for people with grit,” she says.
Show Off The Soft Skills
Toledano says that Tesla measures excellent candidates for three traits: being innovative, driven, and team players. She echoes Nicola by describing an employee who can be comfortable with ambiguity and has an ability to solve tough problems. Additionally, she says, Tesla is looking for people who are willing to experiment, test, and learn. “Failure is okay,” she says, but fail fast and be flexible and adaptable. “We talk to candidates who have never built a car when we put them in a job to help us design and build a car,” Toledano explains. “They’re builders, they’re curious, and problem solvers.”
advertisement
For younger candidates, it may seem like there’s no way to show off soft skills when you’ve only got a short work history. Nicola says, “This is where the extracurricular section of your resume can really pay off.” Sharing what you love to do outside of work provides a small glimpse of who you are as a person, including interning or working full-time while going to school, or that you’ve been recognized for leadership or volunteerism. “We have candidates who participate in Formula SAE, solar club or coding competitions, serve on boards, have written white papers, or are involved in sports or other things that show that the person is well-rounded, passionate, and a team player,” she explains.
Do Your Homework
Nicola says that a standout candidate will have done their homework ahead of the interview. “Not just on Tesla or Elon [Musk], which is some of the sexy stuff,” she says, “but on the problems we are trying to solve.” For instance, she says someone gunning for a sales position at any level should make sure they’ve gone into a Tesla store and can discuss their impression of the customer’s journey and how they might improve it.
She also points out that it is critical that a candidate also demonstrates that they are taking the interview process as an opportunity to assess whether working at Tesla is a good fit for them, too. “The marriage has to work the first time,” she quips. “If they are not in love with the mission, in the end, it can be problematic.” Ditto for being driven, which can be interpreted as someone who thrives in a culture where work takes top priority. Essentially, she says, “We want people to have a good answer [when we ask] ‘Why Tesla?'”
About the author
Lydia Dishman is a reporter writing about the intersection of tech, leadership, and innovation. She is a regular contributor to Fast Company and has written for CBS Moneywatch, Fortune, The Guardian, Popular Science, and the New York Times, among others.
More
Leadership Daily Newsletter
Receive special Fast Company offers.
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The Ace’s Latest Hotel Concept? “A Blank Canvas”
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Design Discourse Is In A State Of Arrested Development
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Tesla Recruiter Shares Six Strategies To Land A Job At The Company
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Partners in EXCELLENCE Blog/David Brock: Active Listening” Is Not A Technique
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“Active Listening” Is Not A Technique
by David Brock on January 28th, 2018
Catching up on my reading, I ran across an article on Active Listening. It was focused on sales people and the author made the statement, “Active listening makes them feel like they are being heard…..”
I’m sure that’s not what the author intended to communicate, but it got me thinking about many other things I hear and read about active listening.
Active listening–at least true active listening is not a technique. We know some of the things we do in active listening–playing back what the individual is saying, mirroring, probing/questioning. These are all very important and very helpful in understanding.
And that’s really the point of active listening–it is to understand, it is to want to learn, it is to truly care. Active listening isn’t good because the other party feels like they are being heard, active listening works because the person is genuinely being heard.
Active listening enables us to see things from the customer point of view–not just factually, but emotionally. We get to understand their hopes, dreams, aspirations. We get to understand their fears, concerns. We can’t listen actively if we aren’t engaged.
Can you imagine, listening, while browsing texts on your phone, nodding sympathetically and periodically saying “I feel your pain….” Yeah, I know I’m exaggerating, but sometimes the discussions on active listening seem like variants of this.
Ironically, active listening/engagement generally begets active listening/engagement. That is, when we are genuinely listening, actively, the people we are listening to will also tend to start listening actively.
Then we–each person–become engaged in a conversation. Then we become engaged in learning/discovering. We become more open to different points of view. We become empathetic as opposed to sympathetic.
People buy from people who listen to them. People buy from people they trust, people buy from people who care. People buy from people who can and want to help them succeed.
This only starts with genuine active listening.
Book CoverFor a free peek at Sales Manager Survival Guide, click the picture or link. You’ll get the Table of Contents, Foreword, and 2 free Chapters. Free Sample
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“Active Listening” Is Not A Technique
by David Brock on January 28th, 2018
Catching up on my reading, I ran across an article on Active Listening. It was focused on sales people and the author made the statement, “Active listening makes them feel like they are being heard…..”
I’m sure that’s not what the author intended to communicate, but it got me thinking about many other things I hear and read about active listening.
Active listening–at least true active listening is not a technique. We know some of the things we do in active listening–playing back what the individual is saying, mirroring, probing/questioning. These are all very important and very helpful in understanding.
And that’s really the point of active listening–it is to understand, it is to want to learn, it is to truly care. Active listening isn’t good because the other party feels like they are being heard, active listening works because the person is genuinely being heard.
Active listening enables us to see things from the customer point of view–not just factually, but emotionally. We get to understand their hopes, dreams, aspirations. We get to understand their fears, concerns. We can’t listen actively if we aren’t engaged.
Can you imagine, listening, while browsing texts on your phone, nodding sympathetically and periodically saying “I feel your pain….” Yeah, I know I’m exaggerating, but sometimes the discussions on active listening seem like variants of this.
Ironically, active listening/engagement generally begets active listening/engagement. That is, when we are genuinely listening, actively, the people we are listening to will also tend to start listening actively.
Then we–each person–become engaged in a conversation. Then we become engaged in learning/discovering. We become more open to different points of view. We become empathetic as opposed to sympathetic.
People buy from people who listen to them. People buy from people they trust, people buy from people who care. People buy from people who can and want to help them succeed.
This only starts with genuine active listening.
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Investopedia: What is 'Wealth Management'?
Investopedia
Wealth Management
Share
What is 'Wealth Management'
Wealth management is a high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning and legal or estate planning for one set fee. Clients work with a single wealth manager who coordinates input from financial experts and can include coordinating advice from the client's own attorney, accountants and insurance agent. Some wealth managers also provide banking services or advice on philanthropic activities.
VIDEO
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BREAKING DOWN 'Wealth Management'
Wealth management is more than just investment advice, as it can encompass all parts of a person's financial life. The idea is that rather than trying to integrate pieces of advice and various products from a series of professionals, high net worth individuals benefit from a holistic approach in which a single manager coordinates all the services needed to manage their money and plan for their own or their family's current and future needs.
While the use of a wealth manager is based on the theory that he can provide services in any aspect of the financial field, some choose to specialize in particular areas. This may be based on the expertise of the wealth manager in question or the primary focus of the business within which the wealth manager operates.
Wealth Management Example
For example, those in the direct employ of a firm known for investments may have more knowledge in area of market strategy, while those working in the employ of a large bank may focus on areas such as the management of trusts and available credit options, overall estate planning or insurance options. The position is considered consultative in nature as the primary focus is providing needed guidance to those using the wealth management service.
Wealth Management Business Structures
Wealth managers may work as part of a small-scale business or as part of a larger firm, most often one directly associated with the financial arena. Depending on the business, wealth managers may function under different titles including financial consultant or financial advisor. A client may receive services from a single designated wealth manager or may have access to members of a specified wealth management team.
Strategies of a Wealth Manager
The wealth manager starts by developing a plan that will maintain and increase the client's wealth based on that individual's financial situation, goals and comfort level with risk. After the original plan is developed, the manager meets regularly with clients to update goals, review and rebalance the financial portfolio, and investigate whether additional services are needed and with the goal of remaining in the client’s service throughout his lifetime.
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Money Manager
Share
A money manager is a person or financial firm that manages the securities portfolio of an individual or institutional investor. Typically, a money manager employs people with various expertise ranging from research and selection of investment options to monitoring the assets and deciding when to sell them.
In return for a fee, the money manager has the fiduciary duty to choose and manage investments prudently for his or her clients, including developing an appropriate investment strategy, and buying and selling securities to meet those goals. A money manager may also be known as a "portfolio manager" or "investment manager.” Examples of leading money managers include Vanguard Group Inc., Pacific Investment Management Co. (PIMCO) and J.P. Morgan Asset Management.
BREAKING DOWN 'Money Manager'
Money managers provide their clients with personalized service, an individualized portfolio and ongoing management. With fee-based management, as opposed to transaction-based management, the client and his or her advisor are on the same side, which means clients no longer have to question the decisions of a broker to buy or sell their securities. A professional money manager does not receive commissions on transactions and is paid based on a percentage of assets under management. Thus, it is in the best interest of both the money manager and client to see the portfolio grow.
Read More +
Wealth Psychologist
Share
Video Definition
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A wealth psychologist is a mental health professional who specializes in issues relating specifically to wealthy individuals. Wealth psychologists are also called money psychologists or wealth counselors. Wealth psychologists help their ultra-rich clients deal with issues such as the guilt they feel about being wealthy, or advise on inheritance issues and counsel parents on how to raise children who are not spoiled by money.
BREAKING DOWN 'Wealth Psychologist'
Wealth psychologists assist many modern wealthy families, most of which built their wealth in one generation. They may not be comfortable with all aspects of being rich, and may have a lot of guilt associated with it. Even for those people who find themselves financially prepared, more are beginning to realize they may not be psychologically or emotionally prepared to cope with wealth. Ample evidence points to the notion that, the more people are prepared in this way, the happier they are throughout their remaining life stages. The younger people are when they begin to work toward full preparation, the more productive their lives.
Read More +
Work With Investopedia
About Us Advertise With Us Contact Us Careers
© 2018, Investopedia, LLC. Feedback All Rights Reserved Terms Of Use Privacy Policy
Wealth Management
Share
What is 'Wealth Management'
Wealth management is a high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning and legal or estate planning for one set fee. Clients work with a single wealth manager who coordinates input from financial experts and can include coordinating advice from the client's own attorney, accountants and insurance agent. Some wealth managers also provide banking services or advice on philanthropic activities.
VIDEO
Loading the player...
BREAKING DOWN 'Wealth Management'
Wealth management is more than just investment advice, as it can encompass all parts of a person's financial life. The idea is that rather than trying to integrate pieces of advice and various products from a series of professionals, high net worth individuals benefit from a holistic approach in which a single manager coordinates all the services needed to manage their money and plan for their own or their family's current and future needs.
While the use of a wealth manager is based on the theory that he can provide services in any aspect of the financial field, some choose to specialize in particular areas. This may be based on the expertise of the wealth manager in question or the primary focus of the business within which the wealth manager operates.
Wealth Management Example
For example, those in the direct employ of a firm known for investments may have more knowledge in area of market strategy, while those working in the employ of a large bank may focus on areas such as the management of trusts and available credit options, overall estate planning or insurance options. The position is considered consultative in nature as the primary focus is providing needed guidance to those using the wealth management service.
Wealth Management Business Structures
Wealth managers may work as part of a small-scale business or as part of a larger firm, most often one directly associated with the financial arena. Depending on the business, wealth managers may function under different titles including financial consultant or financial advisor. A client may receive services from a single designated wealth manager or may have access to members of a specified wealth management team.
Strategies of a Wealth Manager
The wealth manager starts by developing a plan that will maintain and increase the client's wealth based on that individual's financial situation, goals and comfort level with risk. After the original plan is developed, the manager meets regularly with clients to update goals, review and rebalance the financial portfolio, and investigate whether additional services are needed and with the goal of remaining in the client’s service throughout his lifetime.
Next Up Money Manager
Wealth Management
Money Manager
Wealth Psychologist
The Wealth Effect
Investment Management
Manager of Managers - MoM
Discretionary Investment Management
Personal Financial Advisor
Money Management
Funds Management
Money Manager
Share
A money manager is a person or financial firm that manages the securities portfolio of an individual or institutional investor. Typically, a money manager employs people with various expertise ranging from research and selection of investment options to monitoring the assets and deciding when to sell them.
In return for a fee, the money manager has the fiduciary duty to choose and manage investments prudently for his or her clients, including developing an appropriate investment strategy, and buying and selling securities to meet those goals. A money manager may also be known as a "portfolio manager" or "investment manager.” Examples of leading money managers include Vanguard Group Inc., Pacific Investment Management Co. (PIMCO) and J.P. Morgan Asset Management.
BREAKING DOWN 'Money Manager'
Money managers provide their clients with personalized service, an individualized portfolio and ongoing management. With fee-based management, as opposed to transaction-based management, the client and his or her advisor are on the same side, which means clients no longer have to question the decisions of a broker to buy or sell their securities. A professional money manager does not receive commissions on transactions and is paid based on a percentage of assets under management. Thus, it is in the best interest of both the money manager and client to see the portfolio grow.
Read More +
Wealth Psychologist
Share
Video Definition
Loading the player...
A wealth psychologist is a mental health professional who specializes in issues relating specifically to wealthy individuals. Wealth psychologists are also called money psychologists or wealth counselors. Wealth psychologists help their ultra-rich clients deal with issues such as the guilt they feel about being wealthy, or advise on inheritance issues and counsel parents on how to raise children who are not spoiled by money.
BREAKING DOWN 'Wealth Psychologist'
Wealth psychologists assist many modern wealthy families, most of which built their wealth in one generation. They may not be comfortable with all aspects of being rich, and may have a lot of guilt associated with it. Even for those people who find themselves financially prepared, more are beginning to realize they may not be psychologically or emotionally prepared to cope with wealth. Ample evidence points to the notion that, the more people are prepared in this way, the happier they are throughout their remaining life stages. The younger people are when they begin to work toward full preparation, the more productive their lives.
Read More +
Work With Investopedia
About Us Advertise With Us Contact Us Careers
© 2018, Investopedia, LLC. Feedback All Rights Reserved Terms Of Use Privacy Policy
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