Who are you sat next to?

If you’re in the office at the moment take a look at the person next to you. Would you say that he or she is a “good worker” or a “toxic neighbour”?

A recent bit of research by economists from Harvard Business School has shed some light on the type of person you should be sitting next to.

If you’re an “average worker” and you sit next to a hard working and diligent person then your performance is likely to improve.

Unfortunately though the opposite is true and if you’re an average person who sits next to somebody who isn’t very good at their job then that badly performing person could well take you down to their level.

The researchers studied data from seating plans and reports from over 2,000 employees. The performance of these employees was rated based on the time they spent to complete a task as well as quality and effectiveness. Their efficiency was based on how often they had to ask for help.

One of the interesting bits of the research was finding out whether when a person sat next to a high performing individual that person’s performance improved because they learnt from the better performing individual or they were inspired by him or her.

When the research team split these people back up again the average worker’s performance reverted back to the average level rather than stay at the high performing level. This implied that the improvement was not due to learning new skills but instead was due to being inspired by the good worker.

When it comes to sitting next to a “toxic employee” who doesn’t perform, the bad news is that the negativity rubs off on the good employee almost immediately.

So it may well be worth trying to sit next to the stars of the office rather than the toxic ones

A quick word of warning though and if the person you sit next to has recently asked their boss to move away from you asap then the chances are that you aren’t the star of the office but instead are…

Should you employ good looking people?

Should you employ good-looking people or not so good-looking people?

Whilst the obvious answer would appear to be that it doesn’t matter what a person looks like as long as they can do their job properly, researchers in Japan have found out that the attractiveness of an employee can have an impact on the sales of a business.

Interestingly though, it’s probably not the correlation most people would think applies.

Researchers at the Chinese University of Hong Kong studied retail sales in shops and found that the more attractive the shop assistants of the opposite sex were, the lower the sales were. The researchers found that male shoppers were less likely to go into the shop if the more attractive woman in the research study was serving.

Even if they entered the shop with the attractive shop assistant in it, only 40% of them bought something. This compared to 56% who purchased something when a less attractive assistant was serving.

Lisa Wan of the University said “attractive service providers can lead consumers to become self-conscious or embarrassed. This is especially true when the provider is of the opposite sex. Even when the attractive salesperson is the same sex, consumers may feel a sense of inadequacy through self-comparison.

In either case, the shopper may avoid interacting with physically attractive providers, rendering the salespeople ineffective”.

It’s worth mentioning though that the scientists undertaking the research were monitoring a shop selling figures from Japanese comics and the male shoppers were obsessed with computers.

“Male shoppers obsessed with computers” – surely they would only notice the female shop assistant if she was holding a computer?

Zooming in…

At the start of the year zoom calls were relatively uncommon. Now though, with the global pandemic, they are a common feature of business life for most of us.

Whilst some people will creatively claim that their video isn’t working so that they can scroll through their phone whilst half listening to the meeting, most people will have their video on so that the rest of the people in the meeting can see them.

This has had a bit of an impact on fashion. After all, if the lower half of you isn’t being seen why worry too much about what shoes or trousers/skirt you’re wearing.

The London and Milan fashion weeks which took place last month had a definite “waist-up” focus.

For example, the leading fashion house Prada had its logo near the collars of its top. Prada reportedly said that this was not inspired by zoom but rather by the “contemporary human relationship with technology”.

As anyone who has met me will confirm, I’m clearly not an expert on fashion but the cynic in me feels that some people who spend a lot of money on designer clothes will want other people to know what brand of clothes they are wearing.

What better way of highlighting your expensive clothes on a zoom call than to have the logo just below the collar. A clever move by Prada

Other changes which have been reported in women’s fashion recently include an increase in the popularity of jewellery whilst sales of handbags and shoes have fallen.

In summary therefore, it’s important how you look on a zoom call but only if it’s visible…

Out of this world advertising…

Getting professional photos taken for advertising can be expensive but this particular photo shoot for Estee Lauder is expensive.

Very expensive in fact.

4 hours of photography will cost USD 128,000.

That certainly is expensive for 4 hours of work but to be fair it’s a very unusual photoshoot as it will take place inside the International Space Station and the photographers will be the astronauts.

In what will be a first for advertising, Nasa is charging Estee Lauder USD128,000 for Nasa astronauts to take photos and to film some shots of Estee Lauder’s Advanced Night Repair serum face cream in various locations around the space station.

The total fee includes the astronauts’ time at USD17,500 per hour (which is a pretty impressive charge out rate!).

A Nasa spokeswoman said that Estée Lauder was “paying for the astronauts to be the photographer, not to use the product, not to put the product on themselves, not even to open the product”.

Estee Lauder obviously think that the advertising will pay off but some people will no doubt argue that the cost of such photoshoots ultimately has to be recovered by the company and the way they do that is in the price of their products.

The counter argument to this though is that it’s more than just being about the photos in the adverts. The general publicity that Estee Lauder will get from being the first cosmetics business to have their products in space will also be valuable for the company.

An Apple for 100 Companies..

Whilst a lot of companies around the world are struggling or going out of business due to the Covid-19 pandemic, some are doing very well.

Apple is currently the world’s most valuable company and it’s share price has shot up during the pandemic. Like a lot of tech companies, Apple’s valuation has increased as it’s expected to do well in the post Covid-19 world where people are more reliant on tech as they work and shop remotely.

Apple’s valuation is pretty spectacular and at the time of writing the value of Apple is $2.3 trillion (or to write it in it’s full glory $2,300,000,000,000).

To put that into perspective, the valuation of Apple is now higher than the value of the 100 largest companies in the UK – the market value of the FTSE 100 (the 100 largest companies in the UK) is $2.1 trillion compared to Apple’s $2.3 trillion.

Apple’s shares also recently rose by 3.4% due to a four-for-one stock split.

As the name suggests, a stock split is where the shares are split into more shares. The underlying value of the company doesn’t change as it is merely dividing the shares into a larger number of shares.

For example, if you held 1 share before the split which was worth $8, after the split you would hold 4 shares which (in theory) would be worth $2 each so your total holding would still be valued at $8.

Each individual share in Apple though was trading at over $500 before the split and after the split the equivalent value of the new shares was up by 3.4%.

One of the reasons share prices can increase when there is a stock split is that the shares are now within the reach of a larger proportion of individual buyers.

Some individuals who may not have been able to afford to spend $500 on a share may instead be able to spend $125 on a share.

This “opening up” to a wider range of shareholders can cause the share price to increase.

Either way, I’m sure that shareholders of Apple are pretty pleased with the performance of the company.

Cows vs. oats

Things are changing in the milk business. Or rather, I should say things are changing in the dairy milk and vegan milk business.

Over the last few years, the number of people who have switched from cow milk to vegan alternatives such as soya, oat and almond milk has soared.

In the US for example, over 40% of households purchased vegan milk last year according to a report by the Good Food Institute and Plant Based Food Association.

This switch in consumer habits hasn’t gone unnoticed and one of the biggest oat milk producers recently secured a significant investment.

Oatly is a Swedish company who arguably led the movement to Oat milk. They are doing very well and their products are now available at over 50,000 locations in 20 countries.

Last month they announced that a group of investors including leading global investment firm Blackstone Group and celebrities Oprah Winfrey, Jay-Z and Natalie Portman had purchased a 10% stake in the business for $200 million.

That valued the business at $2 billion and for a company which reportedly had about $200 million in sales last year that’s a pretty decent valuation.

The investors are no doubt anticipating further growth as the demand for non dairy milk and oat milk in particular increases.

One thing though that could make it challenging for Oatly is that there are limited barriers to entry for potential Oat milk producers so increased competition is likely to be just around the corner.

One of the attractions of Oat milk is its simplicity. Oats and water are the main ingredients so nothing too complicated there.

Oats are a very easy crop to grow so there’s little to stop companies entering the market. Recently, for example, PepsiCo’s Quaker Oats have launched their own brand of oat milk and it won’t be long before the supermarkets have their own brand oat milk.

When it comes to the consumer, will they be prepared to pay a premium for Oatly milk or will it be a very price sensitive market similar to that faced by the dairy milk industry?

My guess is that prices may be on their way down as competition heats up.

Big Mac with 4 sides

We blogged last year about the former boss of McDonald’s being fired due to a relationship with a colleague but it turns out, there may be more to the story.

Steve Easterbrook used to head up McDonald’s but was fired when he “violated company policy” by having a relationship with a colleague.

The relationship was consensual but it was against company policy which prohibits “any kind of intimate relationship between employees in a direct or indirect reporting relationship”.

McDonald’s agreed to terminate Mr Easterbrook’s contract “without cause”, which in effect meant that he was let go, but not for significant workplace misconduct (ie he didn’t do anything seriously wrong). His payoff at the time was reportedly worth $40 million.

However, things have moved on and it looks like Mr Easterbrook shared a happy meal with more than one colleague.

McDonald’s have said that they have uncovered “undisputed evidence” of three other sexual relationships with staff. Investigators also identified that he had approved a grant of company shares worth hundreds of thousands of dollars to one of the employees he was in a relationship with and this grant took place “shortly after their first sexual encounter”.

When the first relationship was uncovered last year, investigators reviewed Mr Easterbrook’s phone and nothing untoward was found. Further investigation since he left however identified that he had sent nude photos from his company email account and whilst they had been deleted from the phone, they had not been removed from the company’s servers.

As a result of all this additional information, McDonald’s are now suing Mr Easterbrook to recover his $40 million payoff. They are claiming that if he had not withheld this information, they would not have approved his payoff.

Rocking along nicely…

Years ago, advertising largely used to be based around TV, radio, magazines and newspapers. Then the Internet came along and changed things dramatically.

One of the most lucrative areas of Internet advertising is when Instagram posts are sponsored by celebrities.

UK-based company Hopper HQ publishes an annual Instagram rich list.

The most recent list shows former wrestler turned actor, Dwayne “The Rock” Johnson as the celebrity thought to be able to charge the most for a sponsored Instagram post.

Whilst the actual amount that a celebrity gets for posting a sponsored Instagram message is confidential, Hopper HQ run a number of social media accounts on behalf of individuals and companies and are regarded as having pretty accurate estimates.

Back to The Rock and Instagram posts.

How much do you think he can charge for a sponsored post?

Before going into detail, it’s worth remembering that he has 187 million Instagram followers. That’s an impressive figure and roughly equivalent to the whole of the population of the UK, France and Italy combined.

It’s been estimated that he can charge more than $1 million per Instagram post.

That’s pretty impressive isn’t it?

He’s not alone though and the top 10 celebrities who can charge the most per Instagram post according to Hopper HQ are

1. Dwayne ‘The Rock’ Johnson, 187m followers – over $1m per post
2. Kylie Jenner, 182m – $986,000 per post
3. Footballer Cristiano Ronaldo, 225m – $889,000 per post
4. Socialite Kim Kardashian, 176m – $858,000 per post
5. Pop star Ariana Grande, 191m – $853,000 per post
6. Actress and singer Selena Gomez, 180m – $848,000 per post
7. Pop star Beyoncé Knowles, 149m – $770,000 per post
8. Pop star Justin Bieber, 139m – $747,000 per post
9. Pop star Taylor Swift, 135m – $722,000 per post
10. Footballer Neymar da Silva Santos Junior, 139m – $704,000 per post

The most valuable car company is…

Which of the following two motor manufacturers would you say is the most valuable?

The first one produced 2.4 million cars whilst the second one produced 103,000.

This isn’t a trick question but an illustration of how market valuation is very much based on expectations of future rather than historical performance.

The car manufacturer who produced 2.4 million cars was Toyota and up until yesterday was the highest valued motor manufacturer in the world.

The company that only produced 103,000 cars was Tesla and yesterday it’s shares increased to above $1,000 for the first time. This valued the company at £207 billion which was over $6 billion more than Toyota was valued by its investors.

So, despite only producing approximately 4% of Toyota’s production, Tesla is currently the most valuable motoring manufacturer in the world.

There are views that the market sees Toyota as a lumbering giant who is being slow to get into full electric vehicles whilst Tesla is leading the way in terms of the future of driving and electric vehicles in particular.

Tesla certainly seems to have turned the corner. After years of making losses, Tesla has reported 3 straight quarters of profits and is now worth more than Ford, General Motors, Honda and Fiat Chrysler combined.

As well as being pretty innovative in terms of their car designs, Tesla have come up with an impressive idea for their car names.

Earlier this year, Tesla’s Senior Director of Artificial Intelligence Andrej Karpathy gave a presentation on the use of artificial intelligence for full self driving.

During the presentation it became clear that the names of the cars spelt out a nice marketing message.

Their current car models are the Models S, 3, X and Y which near enough spells out SEXY (they couldn’t have the Model E as Ford had already trademarked that so Tesla called it the Model 3 but stylised the 3 so that it looked like E).

They also have 4 vehicles in the pipeline.

Namely, the Cybertruck, the All-Terrain Vehicle, the Roadster and the Semi.

The first letters from the names of the 8 Tesla vehicles spell out SEXY CARS…

A bitter coffee taste…

Anyone that has studied hard for their exams will almost certainly at one time or another utilised the services of a strong coffee.

Whilst desperately trying to cram that last bit of knowledge into your brain before the exams there is often a temptation to grab a strong coffee late in the night to keep your mind awake.

For years students around the world have been utilising the caffeine in coffee to help get that extra mark or two.

Coffee is said to originate from East Africa where legend has it that a 9th century Ethiopian goat herder by the name of Starbucks Kaldi noticed that after his goats had ate some coffee beans they started bouncing around like teenagers at the local disco.

This started the journey of coffee and associated caffeine hits so loved by students around the world.

Over in China, one coffee chain has been in the news for all the wrong reasons.

Luckin Coffee was only set up 3 years ago but had lofty ambitions.

They described themselves as “a pioneer of a technology-driven new retail model to provide coffee and other products of high quality, high affordability, and high convenience to customers” and had vowed to overtake Starbucks as China’s biggest coffee chain.

They grew quickly.

Very quickly in fact as within 3 years they had 4,500 outlets around China.

They were also one of the small number of Chinese organisations to quote their shares on the US Nasdaq market.

Things weren’t all they were made out to be though as in April their shares were suspended on the Nasdaq market after the company revealed that they had uncovered $310 million in fake transactions.

It appears that some people in the organisation were so keen for the growth of the company to continue that they created fake sales so as to give the impression that their revenue was growing quicker than it was in reality.

The company announced the discovery and warned the market that investors could no longer rely on previous financial statements that showed rapid growth.

The ongoing financial investigation by the company has resulted in the chief executive and the chief operating officer being fired yesterday and six other employers have been suspended whilst investigations continue.

The shares are currently suspended on the Nasdaq.