The ancient business of money-lending as updated by Wonga

May 13, 2012

Wonga has been accused of being the latest success in the history of exploiting poverty through money-lending. Errol Damelin, Wonga’s founder, sees it differently

Wonga is another Google

Mr Damelin sees his company having a similar business model to firms like Google, Amazon, PayPal and Netflix:

“Wonga is a platform for the future of financial services, the digital revolution has not yet begun in financial services . .. Wonga is on a multi-year and multi-decade journey to build the future of financial services, using data and technology to make objective and unprejudiced decisions.

We have built the world’s first, completely straight-through processing system for credit, so when somebody comes to Wonga as an individual, or as a business-owner, and applies for a cash advance, the whole process is completely automated”

Responsible lending

The Wonga website explains its code of contact and its approach to responsible lending

Our service is designed to put you in control of your cash flow, for those occasional times when an unexpected expense catches you by surprise. Unlike most lenders, we enable you to choose exactly how much money you want to borrow – down to the last pound – and for exactly how many days. We don’t force you to borrow a fixed sum you might not need, nor do you accrue interest for longer than necessary. The amount you apply for and the length of the loan naturally affect the cost of repayment too, so you can make adjustments until you’re happy with all elements of your application.

Our technology enables us to assess applications in seconds and helps to ensure we only lend to people whom we believe are able to repay us – we simply aren’t interested in lending to anyone who isn’t. Because we carry out a credit check as part of the application process, you may also see an improvement to your credit history when you repay an online cash advance from Wonga. That’s because we inform our credit bureau partner of your trustworthy behaviour with any timely repayment.
We urge you to think carefully before applying for a Wonga loan, because we expect it to be repaid when you promise to. We describe the potential consequences of failing to do so, [and] offer tips for anyone already struggling with debt.

Applying for any form of credit isn’t a decision to be taken lightly. Please remember that if your Wonga application is approved, it becomes a two-way street and you’ll need to keep a serious promise. We want our relationship to be a happy and trusting one, so we lay out the facts as clearly as possible. Only you can decide whether to apply or not, however, so please only do so if you’re confident you’ll have the funds to comfortably make repayment on your chosen date.

The Business Model

The interest rates are explosively high. And yet, there remains a dilemma. A corporate spokesperson explains the rates in terms of someone deciding to take a black cab for convenience, even if it is expensive.

The Guardian newspaper explored Wonga’s business model.

Last week, [May 2012] the Office of Fair Trading launched a review of the payday lending sector in response to concerns that “some payday lenders are taking advantage of people in financial difficulty” and not meeting “guidance on irresponsible lending”. The OFT said it aimed to drive out companies that are not fit to hold consumer credit licences.

Wonga does not expect to be one of the companies driven out of the market, and the company’s advertising strategy tries to set Wonga aside from the myriad of evocatively named rival online companies that offer money if you Google payday loans.

Note to students of leadership

Wonga is a word found in English vernacular, where it (roughly) means money. Wonga sponsors Blackpool football club. Its business model repays a close study. Breaking news: The Economist examines Wonga’s business.

See also growing media attention to the underlying problems of people needing pay day bridging loans

Oxfam’s campaign does not burn bras but recycles them

May 11, 2012

In the 1960s, there were much-publicised demonstrations involving symbolic burning of bras. Oxfam has found another symbolic way of drawing attention to social inequalities, by recycling bras rather than burning them

Creative marketing

Oxfam’s campaign would have passed me by, but for a piece of creative marketing. The University came up with an unusual way of reminding staff to collect their new pass cards. The email suggested that collection of bras on behalf of Oxfam was being held. This would also be an opportunity for collection of the new pass cards from members of the Personnel team.

Motivational aids?

Surely my marketing colleagues were not exploiting Oxfam’s admirable campaign goal to find a way to induce staff to turn up to get their new pass cards? Were they using the recycling bras tag as a motivation aid to get staff cards to those who hadn’t acted on earlier, less-evocative messages?

I was able to collect my card. I also learned more about Oxfam’s worthy campaign.

Fruitizz McDonald is the new fizzy smoothie at the School gates

May 9, 2012

As Innocent gets used to Coca-Cola as its foster parent, it learns of the arrival of a new kid on the block. Fruitizz from McDonalds is a newcomer at the School gates hoping to become popular for its fruitie fizzie nature

McDonald’s chief executive and president Jill McDonald said:

‘We are thrilled to be unveiling Fruitizz, a refreshing fizzy fruit juice drink that will help parents give children one of their five-a-day. For the past three years, we have been working hard behind the scenes to create a fizzy drink that is unlike anything else currently available in high street restaurants.We tried and tested 80 formulations in order to create the right product that delivers nutritional benefit as well as a new, exciting taste.’

That brainstormy feel

The name, with its slightly clunky combination of Fruit and Fizz, has that brainstormy feel to it. If so, no doubt it was the brainchild of a highly paid bunch of creatives.

But according to the story being promoted

McDonald’s aptly named boss Jill McDonald has been aiming to get her rivals in a right tizz. And the high-flying career woman and mum reckons she’s cracked it with the launch of an innovative, sparkling fruit drink for kids. Her brainchild Fruitizz – a blend of apple, grape and raspberries topped with sparkling water – has taken three years and 80 recipes to perfect.

Now it is ready to take its place on the Happy Meal menu and Jill confessed she is quietly confident of success. Available from next Wednesday [16th May 2012] the drink contains 150ml of fruit with no added sugar, artificial colours or flavours. Marking a first for a burger chain, Fruitizz is one of the recommended five-a-day fruit and veg children should have.

Jill, who has two boys aged nine and 11, revealed she had her mum’s hat on when she first came up with Fruitizz while she was the chain’s marketing manager.

A signal of worthy intent?

But will Fruitizz help the McDonald brand, or will it appear as a worthy signal of intentions, like Coke’s support for Innocent?

Country stats from Word Press promotes electronic stamp collecting

May 8, 2012

Recently, Word Press has been inviting editors of blogging sites to view country by country visits to their sites. This reveals an array of national flags plus a map of the world with colour densities of visit frequencies. The information suggests possibilities for a new form of electronic stamp collecting

As each day progresses, there is a deepening of colours on the Word Press map growing from West to East, as new countries and visits are displayed. In the case of Leaders we Deserve, early morning (Greenwich Mean Time) visits are shown as arriving from The United States and Canada to the west, and Australia and New Zealand to the East. By midday, the European countries begin to appear, and the UK overtakes the USA in numbers of site visits.

The stats do not provide full information. Only 10-12 countries with most site visits are reported. This means that as the day progresses, newer locations become masked by the stats of earlier ones.

Middle Earth fills in later

As a consequence of the cumulative reporting of locations, ‘Middle Earth countries’, (Europe, Africa, Western Asia) appear later, and some will be hidden from view.

Data from one day [May 6th 2012]

The image above from May 6th 2012 gave the following pattern of most frequent visits:

United Kingdom 135
United States 123
South Africa 36
Australia 23
Morocco 21
Canada 12
Germany 11
France 10
United Arab Emirates 7
Singapore 7
Malaysia 7

The less frequent visits

I also noted less frequent visits from Indonesia, Myanmar, Saudi Arabia, Morocco, Bangladesh and Egypt, after checking the situation earlier in the day.

Electronic stamp-collecting

At first I was interested in the statistics for Leaders We Deserve. But the flags reminded me of those stamp albums of childhood, with one country per page. I think of it as a form of electronic stamp-collecting and maybe it will become a harmless occupation (like train spotting in Second Life?) for the age of the Google map.

Author’s note

In researching this idea I discovered that electronic stamp-collecting already has its advocates, although traditional methods of stamp collecting are surviving the decline of usage of postage stamps worldwide.

In a season of setbacks for charismatic leaders, Boris Johnson’s star is in the ascendant

May 5, 2012

The newly elected mayor of London is presented at his most Churchillian in a post-election image. If Francois Hollande [and Roy Hodgson in sport] have had the better of more charismatic candidates recently, Boris scraped through against Ken Livingstone

The results for election of Mayor of London was held up until late in the night, before news of the victory for the incumbent, Boris Johnson was confirmed.

The polls always had Boris ahead of Ken, although there was a narrowing of support in the final days of the campaign. The eventual winner emerged on second preference votes. This seems to have reflected a swing in national sentiment towards socialist candidates.

Both main candidates, conservative Boris Johnson, and Labour’s Ken Livingstone are controversial individualists who have repeatedly shown independence from party loyalties. That may explain a difference between Johnson’s success and the wider political failure of the conservative vote to hold. There is a mood afoot that rejects politicians of all three major parties.

It had been an acrimonious campaign, but in the end Johnson was hailed by his rival conceding defeat as probably the next leader of the conservative party.

Charisma revisited: Nicholas Sarcozy vs Francois Hollande

May 5, 2012

As the Presidential campaign draws to a close we examine the leadership style of Nicolas Sarcozy for evidence of charisma, and of his rival Francois Hollande, who has beed described as the ‘normal man’ candidate

Francois Hollande has been described as Mr Ordinary, the anti-charismatic candidate in the Presidential battle. He rejects the idea of charisma as a personality trait, and considers it more a matter of social perception.

As the Guardian noted:

Charisma as perception

If the presidential race is a battle to elect a republican monarch from an array of flamboyant ego-driven personas, the plodding, managerial Hollande is its antithesis. He reasons that after five years of the testosterone-fuelled, frenetic, rightwing Nicolas Sarkozy , and with an economic crisis threatening France, this is the moment for a Mr Ordinary.

Asked about fears that he was too bland to be president, Hollande said: “Everyone says François Mitterrand had huge charisma. But before he was president they used to call him badly dressed, old, archaic and say he knew nothing about the economy … until the day he was elected. It’s called universal suffrage. When you’re elected, you become the person that embodies France. That changes everything.”

A review in the Wall Street Journal reveals various facets of President Sarcozy’s leadership behaviours and style:

Strategic Leadership

His remarks suggest that his strategy concerns are often around projecting his own personality

In his five years as French president, Mr. Sarkozy has been a man in constant motion—part of his leadership strategy of “moving at the speed of light,” as he described it to aides ahead of his May 2007 election. “I’ll be bombarding France with initiatives, and the opposition will get exhausted in trying to catch an ever-moving target,” he said at the time, according to people present for the conversation.

“I know what my strategy should be,” Mr. Sarkozy said to an aide, [more recently] according to a person who was present. “But I sometimes get lost.”

Symbolic leadership

Such a charismatic style also tends to be associated also with an appreciation of the importance of leadership actions at a symbol,ic level:

Mr. Sarkozy recently said that his failing marriage helps to explain some of his actions early on. His presidency got off to a rough start. He had promised a “rupture” with the patrician style of many previous French presidents. “I won’t betray you, I won’t lie to you and I won’t disappoint you,” Mr. Sarkozy said at a victory rally the day of his election. The next day, Mr. Sarkozy and his then-wife jetted to Malta for a cruise on a billionaire’s yacht. Mr. Sarkozy was pelted with criticism over his lifestyle and alleged closeness to France’s business elite—something he has strongly denied. Nevertheless, the controversy continued throughout his term.

“I made a mistake,” Mr. Sarkozy said in April [2012], referring to a luxury Mediterranean cruise. “Part of my brain was busy trying to salvage something, and I did not seize the impact such a symbol would have.”

Motivation and manic energy

Another facet of his style is a manic energy more often associated with a football coach pre-match, or maybe that of a drill sergeant at a boot camp. In February, Mr. Sarkozy kicked off his re-election campaign. “The plan is simple,” he told aides, according to people present. “We go at full speed, and then we accelerate.”

To go more deeply

Leaders we deserve followed the leadership style and career of Segolene Royal, Hollande’s former partner. Her TV debate with Sarcozy four years ago was described at the time as a beauty contest

Now, her belated support for her ex-husband Hollande [Le Monde: ‘the revenge of Segolene’] has been reported as a deal which will see her in an influential position in French politics, if he is elected President.

Another more recent contest between a charismatic and a non-charismatic leaders: Harry Rednapp v Roy Hodgson. Again, victory went to the non-charismatic figure.

On the eve of the final ballot, polls are predicting a win for ‘Mr Normal’.

Breaking News: Aung San Suu Kyi is sworn in to Parliament

May 2, 2012

In an historic and symbolic moment, Pro-democracy leader Aung San Suu Kyi entered parliament in Myanmar [Formerly Burma] to be sworn in to public office. Her personal and political struggle has lasted more than two decades against authoritarian rule, which she has spent mostly under house arrest

The Nobel Peace Prize winner signed a registration book inside the building before taking an oath as a member of parliament. This followed some resistance after her election victory, as Myanmar’s nominally civilian government continues to make reforms.

The Wall Street Journal was one of the first to break the news in the Western media.

Aung San Suu Kyi has recently been receiving increased attention from Western political leaders, including David Cameron and Nicholas Sarcosy.

The Myanmar Times reported this week [April 30 – May 6th 2012]

UN leader Ban Ki-moon on April 23 called for a “harmonious” deal allowing Daw Aung San Suu Kyi to take an oath and enter parliament, ahead of his visit this week.
Mr Ban was expected to arrive in Yangon on April 29 to meet with Daw Aung San Suu Kyi for the first time as well as President U Thein Sein. Mr Ban told reporters Myanmar’s transition has reached “a critical moment”.

“Now is the time for the international community to stand together at Myanmar’s side,” he added, hailing “landmark” by-elections on April 1. “But this fresh start is fragile.”
The UN secretary-general welcomed moves by the European Union and United States to suspend sanctions and said he would discuss ways the United Nations could help the country. “They deserve our full support,” he said.

Asked about a dispute between Daw Aung San Suu Kyi and the president over taking the oath of office, Ban said: “I sincerely hope they are able to find a mutually harmonious way to have smooth proceedings of the parliament.”

The dispute is the first sign of tension with the government since the democracy icon’s electoral victory.

We earlier reported her release from house arrest as “a Mandela moment”.

The New York Times gave a cautious welcome to her swearing in:

Daw Aung San Suu Kyi’s long resistance to Myanmar’s brutal dictatorship gave her people — and the world — hope that her country would someday be free. Her swearing in this week as a member of Myanmar’s Parliament is an important step forward, but the struggle to establish a real democracy is not over.