22_insights_clean-growth-e-and-u

22_Insights_clean-growth-e-and-u

Clean Growth in Energy & Utilities

<h3>Introduction to Clean Growth in E&amp;U</h3>
Growing energy demand, driven by population growth and economic development, has led to an increase in greenhouse gas emissions. As sustainability becomes a worldwide concern, our industry has to ask: How can advances in technology, policy change and behavioural change help solving this issue?
The energy industry has fulfilled the regulatory check marks in order to foster the anticipated energy transformation and now enters into a new phase where each and one of the firms can play a vital role as creators of the future. Whilst the industry builds upon the three “Ds”, decarbonization, deregulation and decentralization, it is moving from its conservative past to a new setting where innovation is key. Its consumer base, which used to be largely passive, has moved to a world of ‘prosumers’ who expect sophisticated, service-based offers. In addition, new competitors enter the market with business models that decrease traditional structures and utilize new means of value creation.
We see the new era as a call for all innovators and restless minds to design ventures and products which energize other providers and consumers to offer and live a better and more sustainable life. So we had to put our heads together, scouted the latest start ups, connected emerging dots to finally create some specific actions to build your clean, profitable business of the future.
Our recent experiences, with clients across a range of sectors, have helped us to uncover three distinct innovation plays that we believe can bridge the gap between ‘purpose’ and truly cleaner business models.
As we genuinely believe that the inherent tension between economic growth and reduced environment impact can be dissolved by looking at industries from a different angle, we are happy to discuss our impulses more specifically with you.
Thank you for downloading our POV. Feel free to send us any remarks or questions.
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Max Wolke

Author

max-wolke

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Hi there!

Inventing the Sustainable Business Models, Products and Services of the Future

21_insights_clean-growth

21_Insights_clean-growth

Clean Growth

Although the majority of purpose-led businesses are reducing their environmental impact and outperforming their peers, the majority of large multinationals are still in the modus of tweaking business models so that they are only slightly ‘less bad’ for the planet. None have yet invented a business model that is truly carbon neutral or one that has a positive environmental impact.
Unfortunately, this incrementalist approach to corporate growth won’t deliver a positive environmental impact great enough to steer the planet clear of a further 1.5°C in global warming, a threshold which if exceeded is forecast to trigger even extremer weather, droughts, famines, and geopolitical conflicts
Which means the arduous task now facing many FTSE 100, DAX 30, CAC40 and Fortune 500 organizations is figuring out how to transition to a cleaner business model. Fahrenheit 212 have formulated five innovation plays to help organizations meaningfully pursue this goal and bridge the gap between purpose and clean growth.
You can access the mobile-friendly version here or&#8230;
&#8230;click the download button to view the full article.
<a href="https://wp.frog.co/wp-content/uploads/2021/09/Clean-Growth-vF-DIGITAL_logo.pdf" target="_blank" rel="noopener">Download</a>

Jamie Corby

jamie-corby

Why critical thinking is an essential tool that can help strategists, creatives, product owners and leaders make better decisions.

21_insights_do-think-twice-its-alright

21_Insights_do-think-twice-its-alright

Do Think Twice, It's Alright

In our <a href="https://www.fahrenheit-212.com/boiling-point/life-after-lean-startup-why-critical-thinking-is-the-key-to-building-profitable-businesses" target="_blank" rel="noopener">last post</a> we described why critical thinking is a necessary and valuable skill that can help to improve decision making and unlock bigger topline growth opportunities. In this post we turn theory into practice.
This is the scene. 
It’s the summer of 2017. We are a fly-on-the-wall in the office of an Automotive executive. He is trying to establish his brand in a fast-growing Mobility as a Service (MaaS) ecosystem, and particularly within urban mobility.
He is open to doing this via acquisition or by building it in-house, and has begun to evaluate a few of the emerging solutions and business models in the market; we are able to spot a coffee stained business model canvas, saddled between an Islay Single Malt and Elon Musk’s biography on a side table in the corner of the office.
But he has a nagging feeling that he hasn’t actively, persistently or carefully considered the data he has gathered, the hypotheses he has formed or the assumptions he has made. Becoming aware of this he reaches for a <a href="https://www.fahrenheit-212.com/uploads/posts/2019/5/20/F212-Critical-Thinking-Checklist.pdf" target="_blank" rel="noopener">checklist</a> he spotted on LinkedIn a few weeks ago, and proceeds to look through the questions.
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-01.jpg" width="100%" />
&nbsp;
<h3>What insights have we generated to suggest there is a pain point and problem to solve?</h3>
He takes out his Mont Blanc and begins to scribble with a rare level of lucidity…
Urban areas are choking with congestion: road and public rail networks are nearing capacity, the average cost per mile of travel is rising and particulate air pollution is posing a public health risk. The status quo is economically, socially and environmentally unsustainable – and this situation will only be compounded as the percentage of people living in urban areas increases from 55% today to a forecast of 68% by 2050. This means we need to better utilise the increasingly constrained physical space in cities for the purposes of travel, whilst controlling the cost per mile of mobility and finding cleaner alternatives.
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-02.jpg" width="100%" />
&nbsp;
An analysis of passenger journey’s across a representative sample of users – from the commuter travelling to work from the suburbs to the retiree reliant on public transport networks – indicate that we are most underserved during their first and <a href="https://venturebeat.com/2018/06/09/why-micro-mobility-startups-wont-survive-as-standalone-services/" target="_blank" rel="noopener">last mile </a>of travel. These are the journey’s we make from our front door to a transport hub that connects us to the next part of our journey. These journeys are often done on foot (which is slow), by bus (which is faster, but not the most direct way of getting from A to B) or on a personally owned push bike (which requires us to lock it up and return to it at the end of the day, plus an initial investment cost).  Although these journeys comprise short physical distances, they still represent a significant amount of total travel time (up to 50% of an end to end journey), especially in areas underserved by public transport networks.
&nbsp;
<h3>The world is speeding up, but we are slowing down</h3>
Making these journeys using existing modes of road transport personal vehicles, taxis and buses are taking longer and longer as vehicle traffic speeds in many of those city centers are now averaging as little as 15 kilometers an hour (9 miles per hour).2 A fascinating big data analysis conducted by Strava, a platform that allows athletes to track their sports activities and connect with other athletes, calculated that running to work in London is now faster than travelling by road.3
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-03.png" width="100%" />
Source: STRAVA and TFL ; * Central London
&nbsp;
This becomes even more interesting when we overlay data that shows the average distance people are travelling is skewing towards short distances — below 15 miles (24km), most probably due to increasing urbanisation. This <a href="https://medium.com/micromobility/episode-8-the-total-addressable-market-for-micromobility-abdddbcde3ba" target="_blank" rel="noopener">analysis</a> of US car journeys estimates the volume of journeys and spotlights the potential value pool:
<ul>
<li>425 billion passenger miles per annum between 0-6 miles (0-9.5km)</li>
<li>612 billion passenger miles per annum between 7-15 miles (11-24km) and;</li>
<li>1.06 trillion passenger miles per annum above 15 miles (24km +)</li>
</ul>
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-04.png" width="100%" />
Source: Medium, Oliver Bruce
&nbsp;
These datasets have helped the exec establish that micro-mobility (the industry term for short distance transport) could serve an unmet consumer need in a very big market ( journeys under 9.5 km). This has helped him to narrow his focus, but he is aware that he is still missing fresh insights and a strong point of view.
<ul>
<li>How do passengers decide between different transport options?</li>
<li>What could these options be?</li>
<li>Where should my organisation play in an evolving mobility value chain?</li>
</ul>
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-05.png" width="100%" />
&nbsp;
<h3>How passengers choose between competing options</h3>
A large number of urban passengers now use some form of journey planning or mobility aggregator like Google Maps, CityMapper, Moovit to get from A to B. These services provide the passenger with a shortlist of options mixing transport modes and travel distances. The majority of passengers decide which one to take based on travel time, cost, accessibility and weather. The solution our exec invests in needs to win based on these decision-making parameters and hierarchy of needs.
But it also needs to seamlessly fit into a multi-modal world. Every signal in the market – from Uber’s Google maps integration to <a href="https://www.moovel.com/en" target="_blank" rel="noopener">Daimlers</a> move into building an urban mobility operating system &#8211; suggest accessibility and integration is no longer a differentiator, but a hygiene factor. This allows him to establish the following design principles:
<ul>
<li>Easy integration with other modes of transport to enable multi- modal end to end trip planning, including payment;</li>
<li>Affordable, or at least price competitive compared to substitute products and;</li>
<li>Regulatory acceptance from cities and countries where this solution could be launched (he is predicting that there will be a backlash from authorities against companies who land and expand in major cities before gaining approval).</li>
</ul>
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-06.png" width="100%" />
At this point it could be tempting to start generating ideas, but we know we are still short of a fresh consumer insight. The decision-making pyramid helps us to understand how passengers decide between options, but we still don’t have a read on their intrinsic motivation.
We therefore need to develop a set of hypotheses that we can test to establish which motivation is most common, most of the time. This will help us to develop a first mile / last mile proposition that captures the greatest possible share of passenger journeys.
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-07.png" width="100%" />
&nbsp;
<h3>Establishing where we should play and how to win</h3>
As well as knowing what motivates consumers, we need to understand how our organisation fits into a fast-evolving mobility value chain. Why? Because this allows us to evaluate where new value is being created, and figure out where and how we could win.
&nbsp;
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-08.png" width="100%" />
<ul>
<li>The yellow layer is the OEM execs core business – the manufacture, sale and leasing of vehicles (cars, buses, trucks). This also includes the sale of additional ‘on top’ services like maintenance and fleet management. The main KPI that drives this business are units sold per financial year, and increasingly service revenue as a percentage of asset sales.</li>
<li>The green layer denotes companies who use their own assets to operate a service. Good examples would be MyTaxi, MoveNow, Ofo, MoBike and e-scooter startups like Lime, Bird, Circ and Tier. These are good analogs for what the automotive exec could do. He knows his organisation has already missed the bus when it comes to use cases like urban car sharing. The KPIs that drive this business are Monthly Active Users (MAUs), Average Ride Length and Usable Life per Asset.</li>
<li>The blue layer are service providers (like bus operators) who buy or lease the assets an OEM manufactures. These are the OEM execs current customers, but they too want to move upstream. Flixbus is a good example of a new service model that is disrupting this space and moving service providers in the direction of platform owners.</li>
<li>Then comes the red layer of platform owners, like Uber and Ly, who don’t own assets but have scaled enormous platforms that connect drivers with passengers. ‘Owning the platform’ has become a new kind of holy grail because Amazon, Spotify, Netflix, Alibaba, The Honest Company and many besides have rapidly become highly valuable platform businesses. But the OEM exec knows this is a very hard place to win as it relies first mover advantage and reaching a critical mass of users for there to be any chance of becoming profitable.</li>
<li>The purple layer are Mobility Aggregators and Smart Transit solutions that help passengers plan a route from A to B – they include Google Maps, Citymapper, Moovit and city branded mobility apps. The OEM finds this layer of the value chain particularly interesting, because he has existing partnerships with transport authorities in a number of major global cities. This is an unfair advantage he has over external disruptors and one he can leverage to position his organisation to play an active role in supporting cities and regions to solve their transport and public health challenges.</li>
</ul>
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-09.jpg" width="100%" />
&nbsp;
<h3>What makes or breaks the business model?</h3>
The exec calls in a gifted young analyst and asks them to build a few schematic Excel models&#8230; 
After being talked through these excel models the OEM exec establishes that the last mile business model and unit economics are significantly different from manufacturing cars or even leasing them. He establishes that in the last mile world four levers make or break the viability of a business:
<ul>
<li>Customer Acquisition Cost (CAC) – getting passengers to try your service costs money, and lots of it. Marketing, promotions, bonuses for referring a friend add up to a high CAC. Therefore a positive <a href="https://medium.com/@adjblog/basic-overview-of-k-factor-in-viral-growth-models-for-your-startup-2ee641b04bfb">K-facto</a><a href="https://medium.com/@adjblog/basic-overview-of-k-factor-in-viral-growth-models-for-your-startup-2ee641b04bfb" target="_blank" rel="noopener">r</a> (virality) is required to affordably increase customer acquisition. This is an important element to quantify, because corporate venturing has little appetite for high CAC costs (and burning dollars to build a user base).</li>
<li>Monthly Active Users or Total Monthly Journeys – this is the volume driver in the business model. Passengers need to be using your service for you to recoup the purchase / manufacture cost of the asset, service build costs and ongoing operational costs. In order to be profitable, the provider needs to achieve a certain number ‘rides per day’ per asset.</li>
<li>Average ride length –revenue per asset is calculated by multiplying the total number of journeys made by the average length of each journey. One element of revenue is fixed (the price unlock and hire the asset i.e. $1), the other is variable (the cost per minute of using the asset).  Estimating the variable component is vital for the OEM exec to understand what average ride length the service would need to reach for it to be profitable. He can sense check this based on the data he has already gathered. The average speed of bike travel is roughly 20 kph and the average travel distance for micro mobility is around 5 km (too long to walk, too short to warrant driving or getting the train), which means average ride length would be around 15 minutes. This figure seems plausible. He uses this as a baseline, and does a sensitivity analysis in 1 minute increments below and above this figure to look at the impact on estimated profitability.</li>
<li>Usable life per asset – stuff breaks.  The OEM needs to estimate how many rides he is going to get out of an average asset before it is written off (either due to wear and tear, or because it gets dumped in a canal). Asset durability and build quality is therefore important. A cheaper purchase price might be a false economy if the asset delivers significantly fewer rides over its life compared to a more expensive, but better constructed asset.</li>
</ul>
This exercise has helped him to understand: how much he can afford to spend on acquiring a customer, how often he needs them to use his service, for how long, and how many times an asset needs to serve them. An example of what a good output looks like is <a href="https://techcrunch.com/2018/04/10/how-to-understand-the-financial-levers-in-your-business/?guccounter=1&amp;guce_referrer_us=aHR0cHM6Ly9zdHJhdGVjaGVyeS5jb20vMjAxOC90aGUtc2Nvb3Rlci1lY29ub215Lw&amp;guce_referrer_cs=bLlqM_6q71gkmdpXzllSEw" target="_blank" rel="noopener">here</a>.
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-10.jpg" width="100%" />
&nbsp;
<h3>Have we identified the big and important assumptions?</h3>
The exec picks up the phone to his head of logistics, who assumes nothing and plans for every eventuality&#8230;
When it comes to building a new service there are many things we wish to be true. The nature of innovation means we need to make assumptions about the future to break new ground. However we need to go in with our eyes open &#8211; a failure to identify these assumptions at the start of the process could trip us up down the line.
Here are a few relevant examples that real businesses have failed to flag:
<ul>
<li>We can build this new solution or deliver it through a partner before our competitors i.e. before we lose first mover advantage. Many large organisatons struggle with agility in their governance and decision-making processes. Their scale and complexity means the statement above is subject to multiple further assumptions: we can get buy in from leadership and move to solution development within months, not years; our organisation has the risk appetite to invest in a solution that is outside of our core business, and so on.</li>
<li>Regulators (cities, regions, national governments) will permit our service. This is a critical assumption we cannot directly control, but that we can influence. It’s vital to flag this one early as it impacts our ability to scale our solution if certain regions or countries pass legislation to limit our service or prevent us from operating.</li>
<li>We will not bear the cost of fines incurred by users of our service. Some regulators are forcing service operators to shoulder the cost of assets le on pavements, this could be an unwelcome surprise on our balance sheet if you haven’t factored it in. This is a more detail orientated assumption, but the devil is oen in the detail.</li>
</ul>
&nbsp;
<hr />
Hint: tree diagrams are a great way of capturing and linking a growing list of assumptions. These can help to priortise the ‘big and important’ assumptions and build further supporting assumptions around a core thing we ‘need to be true’ for our business to fly.
<hr />
&nbsp;
Have we critically evaluated the different options available to us?After all this thinking, doing nothing is still an option. If we believe that we have gathered enough insight and data to begin developing a new solution (i.e. we have met Jeff Bezos’ <a href="https://www.businessinsider.de/jeff-bezos-explains-the-perfect-way-to-make-risky-business-decisions-2017-4?r=US&amp;IR=T" target="_blank" rel="noopener">70% rule</a>), then a new set of options and decisions await us:
<ul>
<li>Will we build the solution ourselves (make it), buy it from someone else or partner to deliver it?</li>
<li>Where will I position myself in the value chain? Will I own the asset and develop the customer engagement layer, or will I try to become the platform provider and avoid owning any assets?</li>
<li>Is this new solution expected to be self sustaining, profit making or a tactic for driving growth elsewhere in my business?</li>
</ul>
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2021/11/21_Insights_do-think-twice-its-alright-11.jpg" width="100%" />
&nbsp;
At this stage in the critical thinking process it is worth pausing to consider a wider spectrum of options and evaluating which ones best suit our strategic goal. To support this endeavor the OEM exec reaches for that Single Malt you might have spotted earlier. The question that now arises, is which cigar to pair it with?
&nbsp;
SOURCES 
1. UN data hub &#8211; [accessed July 2019] &#8211; https://www.un.org/development/desa/en/news/ population/2018-revision-of-world-urbanization-prospects.html 
2. McKinsey, Micromobiity’s 15,000-mile checkup, 2019 
3. Forbes, [accessed July 2019] &#8211; https://www.forbes.com/sites/carltonreid/2018/12/08/ running-to-work-quicker-than-driving-shows-strava-data-from-british-cities/#65514dbdbe01

We've identified some of the pain points adults in work, young people and older adults are facing and the opportunities for organisations to create new value for them.

22_insights_money-worries-why-its-time-for-us-to-address-our-financial-wellbeing-crisis

22_Insights_money-worries-why-its-time-for-us-to-address-our-financial-wellbeing-crisis

Money Worries: Why It's Time For Us to Address our Financial Wellbeing Crisis

“Money, get away / Get a good job with good pay and you&#8217;re okay” &#8211; Pink Floyd
“Anywhere you go it&#8217;s the same cry, money worries” &#8211; Bedouin Soundclash
“I don&#8217;t know what they want from me  / it&#8217;s like the more money we come across / the more problems we see” &#8211; Notorious B.I.G
From rock stars to rappers, single mums to debt-laden students &#8211; it seems everyone worries and cares about money. Money is either freedom or pain, and for different people, rich or poor, the pain is real. Last year 40% of adults in the UK cited money as the primary reason for feeling stressed and anxious, while nearly 75% of 18-34 year olds have at some point experienced mental health or wellbeing issues linked to financial concerns. These facts are why governments, private enterprise and the third sector are paying more attention to ‘Financial Wellbeing’ and how our relationship with money affects how we feel, act and function on a daily basis.
In fact, research comparing the relative impact of wellbeing indicators identifies ‘Financial Confidence’ as our biggest lever for improving wellbeing scores, nearly double that of increasing our level of exercise.
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2022/02/21_Insights_lmoney-worries-why-its-time-for-us-to-address-our-financial-wellbeing-crisis-01.png" width="100%" />
Source: YMCA, Eudaimonia: How do humans flourish (2016)
&nbsp;
So what are the ways into this social challenge, and where are the opportunities for organisations to create new value? We have identified three groups for whom Financial Wellbeing is either at crisis point, or at risk of reaching this point soon.
&nbsp;
<h3>#1 Adults in work &#8211;  Managing cash flow and achieving life goals</h3>
A decade of stagnant real wage growth, public spending cuts, rising inflation and a changing labour market have been squeezing young adults in full time work. That’s before we even begin to think about the ‘squeezed middle’ of families struggling to make ends meet. The challenges facing this group are:
<ul>
<li>Managing cash flow &#8211; this goes beyond tracking what’s coming in (salary, other earnings) and what’s going out (bills, travel, loans), and into forecasting where crunch points might come (unexpected bills, large one-off payments). In the UK, 33% of middle class families struggle with an unexpected £500 bill, and this figure is comparable for in work adults. One way in to this challenge is to foster a more informed approach to credit, when to use it and how to select an option that doesn’t lead to a spiral of unserviceable debt. The other is being signalled by employer / employee solutions like <a href="http://wagestream.co.uk/" target="_blank" rel="noopener">Wagestream</a> (backed by Jeff Bezos and Bill Gates) and <a href="http://www.hasteepay.com/" target="_blank" rel="noopener">Hastee Pay</a>, where employees can receive their earned pay immediately for a one-off charge, instead of having to wait to the end of the month, thereby avoiding potentially costly bank overdraft fees and high interest payday loans.</li>
<li>Alternative credit scoring and widening access to financial products &#8211; this is currently a two-sided problem. On one hand retail banks use rigid risk management and credit scoring frameworks which filter out people in work who present a relatively low risk of defaulting, and pushes them to alternative forms of high interest, predatory lending. On the other hand, people in work are not playing the credit scoring game well enough to build a high credit score which would make them eligible for unsecured lending.  The obvious solve is to change the rules (and deadweight loss to banks and consumers) by developing an alternative (and more progressive) approach to credit scoring. This could mean assessing a candidate based on past and predicted financial behaviour beyond credit (including transactions and savings behaviour). It could (and should) include factors like future earnings potential. The outcome would be fewer people caught in a cycle of high interest debt.</li>
<li>Saving, investing and attaining ‘life goals’ &#8211; if saving for a housing deposit seems futile (because buying a property seems unachievable), what should this generation be saving for? The default position for many is to ‘put something away for a rainy day’. In a low interest environment this does nothing to further the interests of young savers, so organisations need to do better support and cultivate a growth mindset built around ‘making my money work for me’. Alternative forms of investment, like community investment, seed investing to support organisations that work for a purpose you believe in are great ways to engage consumers in a conversation around ‘doing more’ with their hard earned cash.</li>
</ul>
Attacking the other side of the problem, namely ‘savings defeatism’ is becoming more and more relevant. I caught up with Matthew Addison, CEO &amp; Founder of <a href="https://joinstepladder.com/" target="_blank" rel="noopener">StepLadder</a>, who explained that he sees a huge opportunity in collaborative finance:
<blockquote>“by  joining a group of peers and creating that essential social capital alongside financial capital we play a key role in reshaping the financial independence and success of today’s Generation Rent. We have built our offering centered on the belief that ‘together, we are stronger,’ which for StepLadder members should mean: better informed,  better served and &#8211; crucially &#8211; more likely to attain those life goals, such as homeownership, that finance is supposed to enable.”</blockquote>
The next stage of evolution in this space will be integrating the different solutions outlined above (and a growing number of others) into a joined up, easy to understand proposition.
&nbsp;
<h3>#2 Youth &#8211; Equipping young people with the tools for life</h3>
Like our genes, our financial knowledge, behaviours and mindsets are inherited. Some children are the beneficiaries of financial security and financial confidence that has accrued value across generations. Others are the inheritors of bad debt that shape negative, lifelong habits. Similarly, some young people are supported by their personal network to think about what they do with their money (and are equipped for the adult world), but sadly the vast majority are not and stubbornly low levels of financial literacy <a href="https://www.theguardian.com/money/2017/may/27/financial-illiteracy-young-people-oecd-study" target="_blank" rel="noopener">across OECD countries</a> are more than enough evidence of this. So it is both an opportunity and obligation for financial institutions to address, but there are two significant barriers to overcome:
<ul>
<li>The first is how to be relevant and useful to young people from a wider range of backgrounds, so that financial advice and support is available to more than just ‘high value’ families.</li>
<li>The second is how to build financial confidence amongst today’s youth, so that they are equipped to make informed decisions.</li>
</ul>
So let’s look at what needs to be ‘flipped’:
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2022/02/21_Insights_lmoney-worries-why-its-time-for-us-to-address-our-financial-wellbeing-crisis-02.png" width="100%" />
<img decoding="async" src="https://wp.frog.co/wp-content/uploads/2022/02/21_Insights_lmoney-worries-why-its-time-for-us-to-address-our-financial-wellbeing-crisis-03.png" width="100%" />
In short, the opportunity for financial institutions with younger customers is win-win: support your young customers to make more informed decisions and you create higher customer lifetime value. For financial institutions right here, right now this means more than ‘financial education’, it means operating on the terms of young people and understanding their situation (as well as risk) in new ways.
&nbsp;
<h3>#3 Older adults &#8211;  Making the distant future of retirement more graspable </h3>
We are living longer. Healthcare costs are rising. Social security and adult social care cutbacks are biting and forced retirement is forecast to accelerate as automation increasingly substitutes older workforce participants across a range of industries. One thing is clear &#8211; we should prepare for life after work, or at least build an income to support part time work in old age. But quantifying how much we will need across a range of scenarios is difficult. Opportunity beckons in four areas:
<ul>
<li>Personal goal setting&#8211; planning for the long term is made difficult if we are unable to see the impact decisions we make today will have on our world tomorrow. Personalised goal setting, supported by scenario planning tools that help us understand the impact of different choices, are making retirement planning more graspable. <a href="https://vgi.vg/2RL3t4F" target="_blank" rel="noopener">Vanguard are leading the charge in this space</a>.</li>
<li>Single view &#8211; over the course of years we accumulate and store things in different places, and this also goes for retirement savings. Finding, organising and managing these pots can get messy and will only get messier as we <a href="https://eu.tennessean.com/story/money/careers/2018/01/19/millennials-move-when-comes-jobs/1045812001/" target="_blank" rel="noopener">have more careers</a> (now forecast to be nearly 11), and more of us work internationally. Which is why, not only better savings pot integration, but also a single view is becoming critical.</li>
<li>Supporting mindset switching, from habituated accumulation (saving for retirement), to planned decumulation (withdrawing funds to live well when approaching retirement). For many customers who have spent a lifetime building a cushion, it is very difficult to withdraw the funds when they need them. It should be easy, no excuses. Time to fix it!</li>
<li>Time is money &#8211; people approaching retirement (and working part time), or those who have retired suddenly have a lot more of a very scarce commodity: time. How can we use people’s time and willingness to perform valuable public services and reward this, so that retirees can continue to be valuable and participatory members of society, while simultaneously supporting themselves? Or looked at in another way, how could we accrue ‘retirement credit’ across a lifetime, by doing things that are valuable to society, that are redeemable upon retirement and help to support us into old age?</li>
</ul>
Achieving higher rates of return on our Financial Wellbeing 
If we can attack these three big areas, across life stages, we will shift the dial on Financial Wellbeing and create new value for customers and the organisations serving them. At Fahrenheit 212 we have strong opinions on how to win and would like to talk to organisations with the initiative to grab them.

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Max Wolke

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