Thursday, September 29, 2011

Internet Marketing SEO Strategy

As a small business or personal website owner there is such a rush of joy and excitement once you have your first website up and running. However, that excitement starts to wear off a little after you realize that you, your friends and maybe your parents are the only ones viewing it. The internet is the number one place everyone now goes for any type of information or even leisure time. If website viewers want to be entertained or educated, everything is being accomplished online. With that many eyeballs online comes increased competition and also businesses with large marketing budgets. This article provides some intitial key steps on how to start forming your initial Internet Marketing SEO Strategy for more traffic and website hits.

Here are a few important steps and internet marketing strategies to review before you begin optimizing your website for internet traffic:

Know your Business and Website Goals

Before anything else, you need to understand your business goals, website goals and advertising/marketing goals. If you are a business, how will more traffic to your website really convert to more profits or clients? If you are considering doing PPC or Google Adwords, what do you want to achieve with your ads and how are you set up to measure success or ROI? For example, is your PPC or Ad campaign designed to generate sales, increase traffic to your website, or bring about more brand awareness about your company's products? If your focus is on ROI and profits, than you will want to understand how valuable a click is rather than just how many clicks your website is receiving. By understanding your internet market or advertising goals, you can then choose website optimization strategies that will best help you achieve that specific goal. If you have an ecommerce website that sells tulip bulbs and you only make $1.00 profit margin on each tulip bulb, it would not be too wise to pay $2.00 per click to get people to your website. You should then look for other ways to drive traffic to your website or a different internet marketing strategy.

Track and Measure your conversions and results

After completing an initial internet marketing campaign or website optimization, measure what effect your changes have had and how does that relate to your ROI(Return on Investment). In a PPC or Google Adwords campaign your conversion rates, CTR, first page bid estimates, and other statistics can be good indicators of how well your ads are performing. For most advertisers, the key measure of success is the return on investment (ROI). Use conversion tracking tools and Google Analytics to see which of your ads and keywords are most profitable to your business.

If you do not have the marketing budget to do a PPC campaign then another option could be to do article marketing. Writing insightful articles on topics viewers are interested in learning about can also drive traffic to your website.;) By establishing yourself as a legitimate resource or providing new knowledge to viewers interested in the subject can funnel traffic to your website for free. The key to article marketing is being passionate and knowledgeable about your topic. When writing articles they need to be written for the benefit of your viewers not just a sales pitch or marketing scheme.

Begin to Experiment, Test your Market and Adapt as often as Necessary

Let your different Internet Marketing Strategies begin to educate you about what is most effective for your business or niche and what will be most effective in achieving your goals. You will begin to see over time, that some strategies are working especially well and some are not working so well. For example, if you find users aren't responding to a particular ad campaign, delete that ad and try something new. Another example is social media. With all the hype around social media a lot of business owners believe their whole internet marketing strategy needs to be focuses around facebook and twitter. While these are two very powerful tools they may not be the most effective for your business. A restaurant or a spa may have a lot more of the public looking to interact with their social media pages for updates or to voice their opinion than your local watch repair company. The watch repair company should have a different internet marketing strategy, such as providing educational items about watches or getting listed in local business directories online.

Finding the correct Internet Marketing SEO Strategy for your company takes time and perseverance. It is typical to try a strategy for at least 30 days before turning in any different directions. Changes made on the internet in search engines are not instant and they could take a week or several weeks before they crawl your website for new additions.


Monday, September 26, 2011

Business Leadership

Over the past several years during the current economic downturn many groups of business professionals have speculated about what it takes to be a leader. Is a leader someone who grows the company and will stop at nothing to get profits? After all, without profits a business cannot operate. However, we have seen that some leaders will stop at nothing to gain the most profits and have no regard for the greater good of society. The term leader can mean a lot of different things to a lot of different people. This article takes an in depth analysis on the topic of Business Leadership and what clearly defines it.

When analyzing business leadership, the first step is to define some of the traits and characteristics of successful entrepreneurs and business leaders today. With the advent of globalization, the business environment has had an increasing rate of change. With this new change to businesses everywhere, most business markets have become dynamic and volatile. Now more than ever, most companies are looking to their leaders to guide them through these rough waters. All companies are placing a lot more emphasis on business leadership on all different levels throughout their organization.

Managers of the past may have been easily promoted due to large economic growth and may have just been expected to maintain the status quo. Now many managers or successful business leaders have to think outside of the box to constantly deliver growth to their shareholders or superiors. The new business leaders we are seeing in the new economy tend to be visionaries. They look to see how business is changing and try to adapt strategies before any of their markets are impacted. The recent subprime mortgage scandals and housing bubble burst steered several large institutions into bankruptcy. Many companies are now trying to also look for business leaders that will not only keep the profits coming but also build a strong sense of ethics and integrity into their organizations.

After careful investigation and research here are some of the top traits or characteristics noted in most of the business leaders today. Good leaders must be able to keep a clear head and tolerate frustration and stress well. A business leader today must be able to stay calm under adversity and be able to process a clear vision of the actions that need to be taken to accomplish their ultimate goal. One trait of a successful business leader is emotional stability also known as locus of control.

The next trait would have to be self-esteem. When you are a business leader you are constantly being analyzed and many decisions are made quickly. A leader has to know that they will guide the business in the right direction and be confident in their choices. This in turn, can often inspire others in the organization to believe in the same goal or vision.

Drive or need to achieve is often looked at as common trait in business leaders today. If the leader is just satisfied with average results he or she will not continue to push the envelope and often productivity or profits can lack. The drive or need to achieve is rarely filled in a true business leader. They are always looking for the next challenge and create ways to get around obstacles.

Filtering information quickly is also a trait that is held by most business leaders today. Another term used to define this is business acumen. Ted Prince notes "Before the Great Recession, leadership development was essentially a boom-time phenomenon. It could afford to focus on traditional leadership competencies such as interpersonal skills, emotional intelligence and decision making. To some extent, leadership development had atrophied into the study of leadership when things are going well.

Today, we are in a very different place. Business acumen is all about showing how our behaviors directly impact and improve business outcomes, measured in financial and market value terms. Business acumen development aims to fill the chasm in traditional leadership development programs, which involves the behavioral skills that lead to increases in profitability and market value. Business acumen is defined as the capability to bring about positive business outcomes" (Prince).

Optimism is a trait that will be found in every successful business leader. The leader often views problems as a challenge and looks at setbacks as a possible new direction. They are constantly focused on the main goal at hand and will not let many things deter their mindset that the goals will be achieved. If they do not get a sale that day they will still believe they are going to get the sale in the future. Their sense of optimism can often be a motor to keep them driving to their ultimate goals.

Tolerance to ambiguity refers to a person's tolerance to uncertainty and risk. Business Leaders will face this on a day to day basis and have to also possess this trait to be successful in business today. Art Petty writes in his blog that "top performers fight the routine. High performance individuals in all areas of life, from leaders to athletes to great individual contributors work hard everyday to fight the gravitational pull of getting stuck in the proverbial rut. High performance teams and organizations find their comfort not in sameness or routine, but in embracing the ambiguity of the world and the constancy of change and the constant need to change. Many of the best leaders go out of their way to push themselves and their teams to constantly do things different to keep their senses sharp, their individual and collective minds expanding and their ideas fresh" (Petty).

Courage is also a trait that comes up quite often when referring to business leadership. As a leader or entrepreneur you have to have a high tolerance for risk. Generally, when you start out you are all on your own and many more businesses fail than succeed. A true business leader has the gumption to take a calculated risk and keep going when times get slow.

The traits listed above seem to be the most common in the true business leaders today. Some other traits that are highly desirable but may not be found in every business leader are high energy, intuitiveness, maturity, team orientation, empathy and charisma. We can analyze these traits closer to see how a leader can benefit from possessing them.

Generally, as a business leader you have to put in a lot of hours to see your visions through to the end. A leader with high energy can stay alert and focused no matter what large obstacles are encountered by the business. Intuitiveness is another trait that is tossed around in regards to business leader. This can also fall under the umbrella of business acumen. It is also mentioned by many scholars that a leader must know him or her self. When a leader is aware of their strengths or weaknesses a leader can then begin to adjust given the current situation.

To truly be effective and have a high level of intuitiveness, a leader should also possess humility. This would mean the leader has the ability to understand that they do not know everything and the possibility of error can happen. Reasoning and logic can get most people through many situations but there will always come a time were the individual will need to go on their own instincts or gut to get the job done. The true business leaders of today also have maturity and are excellent at adopting a team orientation strategy. The leader realizes he is only as good as his worst employee. Profits, accolades and success must be put second behind developing a positive teamwork atmosphere among a company. It must also be recognized that more can be accomplished by empowering others than trying to rule others or a didactic style of management.

Two other traits that are often found in successful business leaders and sales professionals are empathy and charisma. By being able to relate to many different people on many different levels one can begin to view the world from many different perspectives. Once you are able to understand and empathize with a customer or employee you can then start building trust. Without building trust among customers or employees you will not get the best results from either of them.

A constant debate that goes on in most of society is if leaders are born or are they developed. After extensive research I feel that they are ultimately developed. People are born with certain characteristics or traits but it is how you harness them that ultimately determine how far you can go as a leader. Persistence, timing and circumstances are key elements that can be found in every successful leader but they also worked very hard to develop a lot of the traits listed above if they were not blessed with them at birth.

The key in developing as a successful business leader comes back to the old Greek quote by Socrates, "know thy self." By understanding your natural born strengths and weaknesses you can then begin to develop some of the traits you may be lacking. For example, you may have trouble with public speaking. If this is not one of your strengths then it would be wise to join a toast masters group or any forum where you can consistently practice your public speaking skills and gain feedback from your peers. In the article, "What Makes Leaders Great", Tricia Bisoux interviews many of the directors of today's top MBA schools. Paula Hill Strasser, Director at Southern Methodist University in Dallas points out that the job of a business school isn't necessarily to teach leadership. She states, "We don't believe leaders are born, but that people are born with different potentials to lead."

Her goal as director is to create a program that provides highly personalized experiences that help students discover who they are, what they believe, and how their actions affect others. The article by Bisoux also goes on to list a top 10 of characteristics that all leaders should possess. Many of the characteristics are very similar if not identical to a lot the characteristics mentioned above in this paper. She goes on to conclude that "Leaders often follow such incredibly different paths and take such drastically different approaches that it's difficult to pinpoint the common traits that make them effective. Educators have found, however, that excellent leaders share a set of distinct behaviors' and characteristics; which students must possess if they, too, wish to lead" (Bioux pg. 40-42). Developing yourself as leader and working to strengthen some of your weaknesses can be quite a task in itself. However, a more difficult task when it comes to understanding leadership is how to foster leadership in business or within an organization.

Some internet marketing companies and other large corporations work hard to offer Leadership Development Programs or other ongoing education to continue to grow their employees and others simply hire talent from outside the organization when faced with a challenge. An article from Nancy Lockwood takes an in depth look at Leadership Development and how to optimize human capital for business success. She defines leadership development as the formal and informal training and professional development programs designed for all management and executive-level employees to assist in developing the required leadership skills and styles to deal with a variety of situations. She finds that organizations are increasingly linking leadership development with business value and organizational success. Recent studies found that the more organizations do toward developing leaders, the greater the financial success. They also go on to mention that when linked with organizational strategy, leadership development programs and leadership competencies effectively support profound long-lasting change. At Colgate-Palmolive Company, for example, leadership is governed by three core values; caring, continuous improvement and global teamwork. The company carefully monitors how development fits with its business model and objectives.

Business and being a leader in today's business environment is fraught with challenges and opportunities. Today's highly competitive global marketplace requires dedication and devotion to excellence and the ability to see the big picture that affects the changing face of leadership and business. A lot of successful organizations have moved from secure salary wages to a pay for performance business plan. This helps create an environment where employees are always reaching higher for knowledge in their intensive work environments. It also requires employees to possess adaptability, innovation and flexibility which are key elements in today's global economy (Lockwood).

Now that we have analyzed the many different characteristics that it takes to be a leader and some of the strategies to develop these traits it is time to take a look at some of actions to take once you are in a leadership role to get the highest level of performance, engagement and loyalty from your employees or team members. In the book, Multipliers: How the Best Leaders Make Everyone Smarter, the authors believe that much of what constitutes good leadership can be summarized in two words: respect and selflessness. They believe that some leaders can create more intelligence around them, while others diminish it. They refer to great leaders as "multipliers" and ineffective leaders as "diminishers."

A leader who is labeled as a multiplier views their business as having many intelligent people and they will help figure things out and get even smarter in the process. They view their position in leadership is to foster their employees growth and ask the right questions to each employee. The diminisher mindset is that there are few really intelligent people in this organization and no one will be able to figure anything out without my guidance. The multiplier leaders look beyond their own genius and focus on extracting the genius or innovation out of their employees. They are not always classified as a feel good leader or cheerleader, but more as a tough, detailed manager who sees the potential in every employee and helps them and the company utilize that potential to the fullest.

The authors of this book identify five key behaviors that separate the diminishing leaders from the multiplying leaders. Listed below are some of the characteristics of a diminishing leader:

Empire Builder: Hoards resources and underutilizes talent

Tyrant: Creates a tense environment that suppresses people's thinking and capability.

Know-It-All: Gives directives that illustrates how much knowledge they have on a subject or task.

Decision Maker: Makes centralized, abrupt decisions that confuse the organization and lack ultimate direction.

Micro Manager: Drives results through their personal involvement on almost every task.

Obviously, the multiplying leader possesses a lot of different characteristics needed to help his or her company to grow. The characteristics listed in the book are as follows:

Talent Magnet: Attracts talented people and uses them to their highest point of contribution and growth.

Liberator: Creates an intense environment that requires people's best thinking and work. They help employees to become a problem solver and foster innovation.

Challenger: Defines an opportunity that causes employees to go beyond their normal job scope to solve the problem. Giving the employee more confidence and solving dilemmas within the organization.

Debate Maker: Drives sound decisions through rigorous debate and analysis.

Investor: Gives other people the ownership for results and invests in their success and growth.

The authors provide a great analysis of how to be an effective leader in business. They make a good point in that the skills that get leaders into top positions are not necessarily the same skills they need to lead. We have seen this in many business examples today. Many leaders have the drive, perseverance and other traits to get to the top of an organization but may not have the skills to continue to develop others leaders.

When looking at leadership in business today one has to take all of these elements under analysis. With the advent of globalization every business and industry has become very dynamic and volatile. The leaders that will rise to top will understand which traits of leadership they possess and which ones they need to develop. When they find they have raised to a position of leadership the key will be to grow leaders from those beneath them. The greatest leaders throughout history have shown that their drive to learn new things and new goals is paramount. All the truly effective leaders have admitted to being lifelong learners and constantly allowing their view of the world and their surroundings to change.

Sometimes a really good quote can summarize an entire article, argument or even an advanced theory. A quote from John Quincy Adams encompasses what it means to be a leader in business today and concludes the analysis of leadership well. "If your actions inspire others to dream more, learn more, do more and become more, you are a leader" -John Quincy Adams.

Works Cited:

 Bisoux, Tricia. What Makes Leaders Great. BizEd. September/October 2005.

Lockwood, Nancy. Leadership Development: Optimizing Human Capital for Business Success. HR Magazine, Dec 2006. Vol 51 Issue 12.

Petty, Art. Blog: Management Excellence. Leadership Caffeine: 7 Odd Ideas to Help You Get Unstuck. March 21, 2010.

Prince, Ted. Building Better Business Acumen. Chief Learning Officer. August 2010.

Wiseman, Liz. Multipliers: How the Best Leaders Make Everyone Smarter. Harper Collins Publishing. June 15, 2010.


Friday, September 23, 2011

Business Negotiations

Every time we engage in conversation with another individual we are generally negotiating a view, discussion or action. Everyone has different filters from which they perceive the world or their surroundings. These filters are developed throughout one's life as they grow from a child to an adult. Some of the main influences that can develop one's filters are parents, friends, family, social environment, religion, school and experience. As these filters are molded every individual brings a different view point to a negotiation or business discussion. Understanding the angle or view of an individual with whom you are negotiating is key to laying the foundation to work towards a viable solution.

One of the more widely known methods of understanding human negotiation psychology is the Thomas-Kilman Conflict Mode Instrument, also known as the (TKI). This model asserts that an individual's behavior falls along two basic dimensions: assertiveness - the extent to which the individual attempts to satisfy his or her own concerns and cooperativeness - the extent to which the individual attempts to satisfy the other's person's concerns. This instrument then places an individual into five different style methods when it comes to dealing with conflict.

The first negotiation style is competing.

Competing is an assertive and uncooperative, power-oriented style. Most individuals that fall into this category tend to pursue their own interests at the expense of other's using whatever methods they can to win the negotiation. The next style is collaborating. Collaborating is both assertive and cooperative. When collaborating, an individual attempts to work with other individuals to find a solution that fully satisfies the concerns of both. It involves digging into an issue to identify the underlying concerns of the two individuals to find an alternative that meets both sets of concerns. Collaborating between two individuals can take the form of exploring a disagreement to learn from each other's insights, resolving some condition that would otherwise have them competing for resources, or confronting and trying to find a creative solution to their conflict.

The next style is compromising.

Compromising is generally right in the middle of the assertiveness and cooperativeness dimensions. When compromising, parties look to seek a mutually acceptable solution that can benefit all parties involved. Compromising might mean splitting the difference, exchanging concessions, or seeking a common ground position. However, compromising can also mean that both parties are giving up something to meet on the middle ground and this is not always a positive.

Another type of style is avoiding.

Avoiding is unassertive and uncooperative. When avoiding, an individual does not immediately pursue his or her own concerns or those of the other person. The individual is generally side-stepping the true conflict at hand. They generally find ways to withdraw or postpone an issue to avoid a threatening or intense situation.

The last style of the five mentioned in TKI model is accommodating.

The accommodating style is generally unassertive and cooperative. Generally, an individual that has an accommodating style will neglect his or her own concerns to satisfy the concerns of others. An accommodating style will just accept the view or stance of others and does not try too hard to push their own objectives onto others.

Once an individual identifies what method of negotiation they often fall into, then they can begin to understand what some of their strengths and weaknesses may be during a negotiation. All the different styles or methods have different strengths and weaknesses associated with them. Individuals who participate in sales or internet marketing consulting have to learn to negotiate often and with many different personality types.

Competing can be valuable at times when a decisive action is needed and that individual is not afraid to take control of the situation and make an immediate decision. However, some of the negatives of this style are that a lot of the competing individuals always fight for influence and respect. They may not even have the best solution or not know the answer but often push their opinion on others and act more confident that they feel. This style or method can also cause those around you to inquire less about information or opinions and everyone will be less likely to learn from the negotiation or conflicts.

Collaborating seems to be one of the more effective negotiation methods. The main strength of the collaborative style is that they generally find integrative solutions and adhere to the concerns of both parties because they understand that some items may be too important to compromise. This style can also be very good at merging insights from a variety of people with very different perspectives on an issue or problem. This method can also be viewed as a style that still is able to accomplish all their objectives without rolling over the other parties involved. They are able to gain commitment by incorporating everyone's concerns into a consensual decision.

The weaknesses in this style are fairly limited. However, every negotiation or conflict is different so there will always be times when one method will be better suited for that negotiation. The weakness in always collaborating during a negotiation is that it can take a lot of time and effort. There may be situations where you do not have the luxury of time and effort. Some negotiations don't require advanced solutions or the time it can take to understand the ultimate goals and viewpoint of every individual involved in the negotiation.

Everyone has heard the old saying that it is always best to compromise. However, when truly analyzing this method more in depth that may not always be the case. In a compromise all parties involved are giving up something to help the other achieve their goal. Even in a compromise where the results are considered to be Pareto optimal, individuals would still have to give up some of their ultimate goal to have all the others achieve the optimal position for all parties involved. This style can also lead some to unintended costly compromises of principles, values, long-term objectives, or company welfare. The main benefit of this style as many are aware is that it often satisfies the needs of all parties involved in the negotiation. It can also be a good way to achieve a quick resolution to a complex issue.

Avoiding generally has more of a negative connotation to it than some of the other negotiation styles. However, there can be at times, some advantages to the avoidance method of conflict. This can be a viable way to solve a conflict or negotiation if the potential costs of confronting a conflict outweigh the benefits of its resolution. It can also be used if an issue is not important enough to address and time will be wasted if the negotiation about the issue even begins to ensue.

Last but not least in the methods of negotiating is accommodating. Accommodating can often help a negotiation in the future because if one accommodates to others' needs initially they may be viewed very favorable right away by the others involved. Accommodators are also good at reading situations and can realize when they are wrong. They often can allow better positions or decisions to be considered, able to learn from others and demonstrate that they are caring and reasonable to others needs. However, if one is always accommodating then they may be sacrificing many of their beliefs or ultimate goals just to appease the other parties involved.

After one begins to understand the method or style he or she may fall into then it is time to understand the some of the steps needed to reach an agreement. The first step is to understand everyone's goals or objectives. After one is able to understand the other parties motives than they can begin to understand the needs of each individual and starting negotiating towards a common ground. A key in beginning to uncover an individual's needs and form a common ground is to start to ask some open ended questions.

After gaining a strong understanding of the other parties needs then we can begin to understand how closely their needs fall in line with our objectives. In a lot of situations you can start by gaining agreement on a collaborative effort to solve the problem and fulfilling each party's needs. Then once trust has been established and the other party understands that you are not only searching to obtain your own objectives but also helping them to reach theirs it will become easier to negotiate more of the greater details.

The next step after understanding the other party's needs and working towards a common ground is to start surveying the options available to you. An option can be a possible agreement or part of an agreement that can satisfy either party's objectives. By beginning to explore different options both parties will be able to see different solutions to the problem coming to the table. When you create different options you are create value to the negotiation and building blocks to move the negotiation further down the continuum.

Most of the best negotiations are those in which a number of options have been explored. The first resolution to a conflict is not always accepted and not necessarily the best option for all parties involved. The more options that are generated, the greater the chance that one of them will mutually and effectively satisfy the differing needs of all parties involved. Often, by understanding each other's needs, one can begin to formulate some possible ways to execute a strategy that better solutions and give you some more creative bargaining power.

The key behind developing options in a negotiation is to take organized approach at understanding each parties needs and creating a range of options that can fulfill most of them. To do this one must always come to a negotiation with an open mind. If you do not try to understand the other individual's viewpoints then you will never be effectively working towards a strategy that will fulfill both of your goals. The more options you begin to create, the more room or leverage you will have in that negotiation. To create these options you have to continually remind yourself of the needs and common grounds of the other party and also remember to take into account differences in perception or the filters that were mentioned in the beginning of this paper.

The next items to understand in creating options are timing and risk. Some individuals enjoy the rush of risk and have to make tough decisions in a limited amount of time while others cannot stand the idea of it. Everyone has a different tolerance for risk and they are also different on the speed in which they operate, take action and make decisions. When dealing with any of these scenarios in a negotiation the best action is to try and accommodate the timing involved in the decisions that have to be made.

According to Roger Fisher and Danny Ertel, authors of Getting Ready to Negotiate, when people have several of something, they value the last one somewhat less than those that came before. Fisher and Ertel also state that differences in the marginal value to each party, of some of the goods under negotiation, can create opportunities to improve the overall value they each receive. There is no guarantee that these value creating trade-offs will work in every negotiation. However, if one strives to create good options, prepare in advance, and carefully consider opportunities that create value, then possibilities will become available.

As described by William Ury in his book, Getting Past No, an independent standard is a measuring stick that allows us to decide what a fair solution is. Some common standards include: market value, fair and equal treatment, laws, precedents that have been established in the past. Standards can be utilized when one begins to work or negotiate with a new customer. By establishing certain standards it can help to form the common ground in the negotiation that was mentioned earlier in the paper. Without setting standards the negotiation can have no boundaries and will only make it more difficult to come to a viable solution.

Negotiations always differ in complexity and content. Understanding the different style or methods used by different individuals will help to identify their needs and wants. After understanding the needs and wants it is then time to form the common ground. Once common ground is established in the negotiation then it is time to present the options that will help all parties involved achieve their most viable solutions. Keeping an open mind and always trying to understand the argument from the other individuals' viewpoint will always help achieve the main objectives in a negotiation. A good quote by John Lubbock encompasses a lot about negotiations, "what we see depends mainly on what we look for." By keeping an open mind during any negotiation one may be able to find new possibilities that he or she did not even know existed.

Works Cited:

Roger Fisher and Danny Ertel. Getting Ready to Negotiate. Penguin Books. 1995.
K. Thomas and R. Killman, The Conflict Mode Instrument. (Tuxedo Park, NY: XICOM, 1974). Negotiation 6th Edition. Roy J Lewicki, David M. Saunders, Bruce Barry.
Ury, William. Getting past No. Bantam Books. 1993.


Tuesday, September 13, 2011

Economic Business Growth

Many Firms in the U.S. have increased output per labor hour significantly in the last couple years. Combined with actual drop in wages, this has boosted profitability for many companies without employment growth.

Economic growth is driven primarily by increases in productivity. Greater productivity allows us to do more work with fewer resources. Productivity growth is important to the firm because it means that it can meet its obligation to workers, shareholders and governments, and still remain competitive or even improve its competitiveness in the marketplace.

 There are essentially two ways to promote growth in output:

a.) increase productivity
b.) bring additional inputs into production.

Adding more inputs will not increase the income earned per unit of input unless there are increasing returns to scale. In fact, in the beginning it is likely to mean lower average wages and lower rates of profit.
Productivity was able to climb 6.9% in the U.S. mainly from strong bottom line growth. Many firms cut a substantial amount of employees and have the remaining ones working twice as hard. The problem with this is it can only be sustained for so long as many employees will eventually burn out. Also when working employees harder for less pay more errors may be made in production because they do not have time to double check any processes. Eventually, a firm also has to hire new employees to increase output and profits.

If the firms begin to rehire employees that were laid off and already have the skills necessary to complete the job then they may be able to sustain a decent amount of productivity growth. However, once they start hiring new employees that have to be trained, productivity growth may slow because of the new added salaries and relatively low production of a novice employee.

At the national level, productivity growth raises living standards because more real income improves people’s ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs. Innovation and technology will be key to sustain high levels of economic growth and productivity in the U.S. Expect to see more out of the box techniques for marketing and advertising. With companies watching every dime they spend we will continue to see more companies going to digital or internet marketing to constantly track costs and get a better return on investment than previous advertising methods which were difficult to measure results.