Are You Happy? The Secret Killer of Employee & Customer Experiences

Are You Happy? The Secret Killer of Employee & Customer Experiences

I want to start this article by asking a rather profound question: Are you happy?
 

Whether you feel that these three words constitute a profound question or not, have a think about it for a moment. If it is not a question that you can answer quickly, then it warrants greater time to consider. I meet a lot of people as I travel around the world – I rarely ask them this question. However, very often, the people I meet are anything but happy – especially when it comes to the working aspect of their lives.

As human beings, we spend most our lives at work. Even though I now work for myself, much of my career was spent working for others.

One thing that has stuck with me, as both business owner and employee, is that stress and anxiety has a profound effect on my behaviour, my business performance, my friends and perhaps most significantly, my family.

Many of us will be affected by varying degrees of stress and anxiety during our lifetimes – some of us are affected more than others.

Yet despite this fact, the way we ‘feel’ as human beings at work is not commonly spoken about. In fact, I would argue that simply acknowledging or even ‘admitting’ a level of stress or anxiety is still considered a weakness… or a ‘taboo’.

Today, the pressure on men and women all over the world increases on an almost annual basis.


Creating and maintaining a quality of life that balances both personal and career goals is ever more challenging. In our working lives, businesses and organisations just appear to want more and more from us, while giving back less and less. The result is stress and anxiety – although I see another key effect happening as well.

There is absolutely no doubt that the stress and anxiety being felt by millions of working people is having a hugely detrimental effect on BOTH employee and customer experiences. The longer this fact goes unnoticed or unaddressed, the worse it will be for all of us. Stress and anxiety is prevalent at all levels – from CEOs to front line staff – the sense of unabating pressure is immense. Some people can manage their stress and anxiety – others not. Some get angry and shout. Others hide away and avoid confrontation. Much of the time, people just shut off their minds and stop thinking, preferring to focus on simple completion of tasks. The majority also stop talking, keeping their stress and anxiety to themselves, whilst taking out their frustration on everyone close to them – and sometimes even their customers.

I myself have felt this way – angry; upset; frustrated; scared; confused – there have been times in my career when I thought I was the only one. For many years, I never talked about the way I felt. I had regular moans and groans about the way I was being treated by my superiors – but don’t we all! However, it was very uncommon for me to actually talk about how I was feeling – that knowledge was locked firmly inside my head!

Towards the end of my employed career, this situation changed. I was fortunate enough to be part of a management development programme. During that period of my life, I was introduced to a chap called Mark Thompson – a man who ended up becoming a transformational mentor of mine. Mark was the first person I talked to about my career. Mark was also the first person who listened. What I learned about myself has stuck with me ever since.

Human beings never stop learning – about things and about themselves. To understand if we are happy or not, we need to be able to talk openly and honestly about the way we feel, so we can have the confidence to make decisions that benefit us. Today, I am happier in my career than I have ever been – in February, I will have been running my own business for five years – an achievement I am immensely proud of. However, that does not mean I do not feel stress and anxiety as much as when I was employed. In fact, I would argue I feel more stress and anxiety now than I did then!!

That is why I am still talking – a brilliant mentor called David Downes now has the pleasure of listening, guiding and coaching me to feel confident about the things I do – my time with him is invaluable. Talking with David allows me time to think – time to reflect – time to reassess. Time with David allows me to appreciate the things I do, whilst understanding what I might consider doing to make me and those around me ever happier.

As my own boss, I have decided to invest time and money in looking after me. I could still do far more to ensure the same for my family – but I am working on that. By investing in me in this way, I can be more productive, effective and useful for my clients. Therefore, I believe that all companies – however big or small – should be doing the same. Stress and anxiety is having a direct effect on interactions with employees and customers alike. Companies have a responsibility to look after their own people – and not just their wallets – but also their minds.

So, ask yourself a slightly different question:

Are your colleagues happy?


If the answer to this is “no”, or “I’m not sure”, then do something about it – and quickly. Let them talk. Let them be listened to. Let them learn. Making our people happier will immediately make our customers happier – the Return on Investment could not be clearer.

Am I happy? Yes… but. There is always one of those. I am incredibly lucky to have now found my vocation. I love what I do for a living. Yet my working life is just part of the puzzle. I will keep on talking and learning – and encouraging others to talk and listen to. We must never be scared to open up about the way we feel – we must admire the courage of those who do and help others to do so as well. Don’t let stress and anxiety kill the experiences of your employees. Do something about it before they kill the experiences of your customers.

Ian Golding
Client Experience
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Ian Golding is a Certified Customer Experience Professional. A highly influential freelance CX consultant, Ian advises leading companies on CX strategy, measurement, improveme ... Click for full bio

Alternative Beta Strategies: Alpha/Beta Separation Comes to Hedge Funds

Alternative Beta Strategies: Alpha/Beta Separation Comes to Hedge Funds

Written by: Yazann Romahi, Chief Investment Officer of Quantitative Beta Strategies, J.P. Morgan Asset Management

A quiet revolution is taking place in the alternatives world. The idea of alpha/beta separation has finally made its way from traditional to alternative investing. This development brings with it a more transparent, liquid and cost-effective approach to accessing the “alternative beta” component of hedge fund return and a new means for benchmarking hedge fund managers.

The good news for investors is that the separation of hedge fund return into its components—rules-based alternative beta and active manager alpha—has the potential to shift investing as we know it. These advancements could democratize hedge funds and, at long last, make what are essentially hedge fund strategies available to all investors—even those who aren’t willing to hand over the hefty fees often associated with hedge fund investing.

A benchmark for alternatives


With respect to traditional equity investing, we have long accepted the idea that there is a market return, or beta—but this hasn’t always been the case. Investors used to assume that to make money in the stock markets, one needed to buy the right stocks and avoid the wrong ones. The idea of a market return independent of skilled stock selection seemed ridiculous to most market participants. Yet today, we would never invest in an active manager’s strategy without benchmarking it against its respective beta.

Interestingly, hedge fund managers have been held to a different standard. Investors have been much more willing to accept the notion that hedge fund strategy returns are pure alpha, and that their investment returns are based entirely on the skill of the fund manager. That notion explains why investors have been willing to accept a “two and twenty” fee structure just to access what has been perceived as one of the most sophisticated and powerful investment vehicles available.

In thinking about the concept of beta, consider its precise definition—the return achievable by taking on a systematic exposure to an economically compensated risk. In traditional long only equity investing, the traditional market beta has been further refined as a number of other risks have been identified that are commonly referred to as “strategic beta.” These include factors such as value, momentum, quality and size. But no one ever said that these risk factors must be long-only.

Over the past decade, as more hedge fund data became available, academics began to disaggregate hedge fund return into two components: compensation for a systematic exposure to a long/short type of risk (alternative beta), and an unexplained “manager alpha.” What they found is that a significant portion of hedge fund return can be attributed to alternative beta. That fact has turned the tables on how we look at hedge fund return. With the introduction of the alternative beta concept, hedge fund managers will have to state their results, not just in terms of total return, but also as excess return over an alternative beta benchmark.

Merger arbitrage—an alternative beta example


The merger arbitrage hedge fund style can be used to illustrate the alternative beta concept. In the case of merger arbitrage, the beta strategy would be the systematic process of going long every target company, while shorting its acquirer. There is an inherent return to this strategy because the target stock price typically does not immediately rise to the offer price upon the deal’s announcement. This creates an opportunity to purchase the stock at a discount prior to the deal’s completion. The premium that remains is compensation to the investor for bearing the risk that the deal may fail.

Active merger arbitrage managers can add value by choosing to invest in some deals while avoiding others. Therefore, their benchmark should be the “enter every deal” strategy, not cash. In fact, the beta strategy explains the majority of the return to the average merger arbitrage hedge fund. And it doesn’t stop there. Other hedge fund styles that can be explained using alternative beta include equity long/short, global macro, and event driven. Note that the beta strategy invests in the same securities, using the same long/short techniques as the hedge fund strategy. The difference is that the beta strategy is a rules-based version that can become the benchmark for the hedge fund strategy. After all, if a hedge fund strategy cannot beat its respective rules-based benchmark (net of fees), an investor may be wiser to stick to the beta strategy.

Implications for investors


What does all this mean for the end investor? Hedge funds have traditionally been the domain of sophisticated investors willing to pay high fees and sacrifice liquidity. Alpha/beta separation in the hedge fund world means that investors can finally choose whether to buy the active version of the hedge fund strategy or opt for the passive (beta) version. Hedge fund strategies can be effective portfolio diversifiers. Now, through alternative beta, virtually all investors can access what are essentially hedge fund strategies in a low cost, liquid, and fully transparent form. For investors who haven’t had prior access to hedge funds, this could be welcome news. Not only can investors look at an active hedge fund manager’s strategy and determine how it has done compared to the systematic beta equivalent, they can also invest in ETFs that encapsulate these systematic strategies.

When looking at one’s traditional balanced portfolio today, there are plenty of questions around whether the fixed income portion will achieve the same level of diversification it has provided in the past. After all, with yields still low, there is little income return. Additionally, the capital gains that came from interest rate declines are likely to reverse. With fixed income unlikely to adequately fulfill its traditional role in portfolios, there is a need to find an alternative source of diversification. This is where alternative strategies may help. For investors seeking to access diversifying strategies in liquid and low-cost vehicles, alternative beta strategies in ETF form are one option.

Looking for an alternative to enhance diversification in your portfolio?


For investors looking to further diversify their overall portfolio, JPMorgan Diversified Alternatives ETF (JPHF) seeks to increase diversification and reduce overall portfolio volatility through direct, diversified exposure to hedge fund strategies using a bottom-up, rules-based approach.

Learn more about JPHF and J.P. Morgan’s suite of ETFs here

DISCLOSURE

Call 1-844-4JPM-ETF or visit www.jpmorganetfs.com to obtain a prospectus. Carefully consider the investment objectives and risks as well as charges and expenses of the ETF before investing. The summary and full prospectuses contain this and other information about the ETF. Read them carefully before investing.
J.P. Morgan Asset Management
Empowering Better Decisions
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See how ETFs differ from other investment vehicles, learn how to evaluate them, and discover how ETFs can be used effectively to achieve a diversity of investment strategies. ... Click for full bio