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GILLA $BILLION STRATEGY TO BE FIRST IN GLOBAL VAPING

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Don Fenton and daughter

The author teaches marketing at the University of Toronto. His daughter Rachael is one of the one billion.

By Don Fenton

Don Fenton and daughter

Don Fenton and daughter

According to the World Health Organization http://www.who.int/en/ about a billion people on the planet smoke. In the west, at least, many of them are trying to quit with e-cigarettes or other vaporizing devices in search of a safer way to continue their nicotine habit.

Since 2004, when the products were first introduced to the market by Chinese entrepreneurs, use has skyrocketed. Today they represent a booming industry estimated at US$3.5 billion in 2015 by Reuters/Ipsos.  http://www.reuters.com/article/us-usa-ecigarette-poll-analysis-idUSKBN0OQ0CA20150610

As smokers try to quit or make the switch, they chip away at worldwide annual tobacco revenues estimated at $315 billion. And, at the eye-popping yearly profits of the industry’s market leaders which the Tobacco Atlas pegs at around US$45 billion, equivalent to the combined annual profits of Coke, Disney, General Mills, FedEx, AT&T, Google, McDonald’s and Starbucks.

Problem/Solution

So, it’s probably safe to say that the fast growth of the alternative industry of vaping, as proponents call it, is not going to slow down any time soon despite legislation in predominantly Western countries to control and tax its use.

In fact, calling e-cigarettes and vaping 95% safer than smoking, Public Health England  https://www.gov.uk/government/publications/e-cigarettes-an-evidence-update recently endorsed their use to reduce harm and save on health costs related to the one in five adults in the UK or about ten million people who smoke.

It is well known that many people vow to give up smoking as a New Year’s resolution.

David Cameron, the British Prime Minister, in response to a question from Mike Pawsey, Conservative MP for Rugby and Bulkington about the Public Health England announcement and the misfortune that half of Britons are unaware of the benefits of e-cigarettes, said in the House of Commons “Certainly, as someone who has been through this battle a number of times…we should look at the report from Public Health England…it is promising to see that over all, one million people are estimated to have used e-cigarettes to help them quit or have replaced smoking with e-cigarettes completely.”

Other governments, especially those with a public health system, must have taken notice.

Carpe Vapeum

Gilla GSimmondsAnd one visionary entrepreneur with a first-of-its-kind public company now operating in the United States, Europe, Africa and Asia has seized the opportunity to be the global leader in this entirely new business space.

Graham Simmonds, CEO of Gilla Inc. (OTCQB:GLLA)  http://gilla.com/ a designer, marketer and distributor of electronic cigarettes, vaporizers, e-liquids and related accessories thinks that vaping will surpass that of e-cigs (he calls them cig-a-likes) and overtake the sales of traditional cigarettes in about a decade.

Gilla Chairman & CEO J. Graham Simmonds

“There are three really good reasons for the success of our business beyond our strengths in innovation, management and being first past the post,” says Simmonds. “The pace of innovation in the vaping business, growing demand from consumers and an unrelenting trend toward safer products.”

Simmonds puts his money where his mouth is. He has served as a Director and as Chief Executive Officer of Gilla since 2012 and as Chairman of the Board since May 2015.

In an industry that is only ten years old, Gilla has expanded apace. The company white labels for established cigarette and tobacco manufacturers with thousands of distribution points across North America and the world.

Consolidation Strategy

Gilla Chairman & CEO J. Graham Simmonds

Gilla Chairman & CEO J. Graham Simmonds

In a series of bold steps, Gilla recently acquired an e-liquid manufacturing facility in Florida, an e-liquid subscription based online retailer, the Craft Vapes e-liquid brand with retail operations in the United States, the United Kingdom and France and formed Gilla Europe serving 25 European countries with a sales and distribution team, offices, logistics and warehousing.

 “We absolutely plan to be the global leader in the manufacturing and distribution of e-liquid brands and proprietary recipes for the vapor industry” says Simmonds. “I firmly believe our business will acquire an increasing portion of the tobacco market, year over year.”

At forty-four, that’s a nice big playing field for Simmonds, an aggressive ski enthusiast with seventeen years of experience in public company management and business development in the gaming and technology sectors.

Gilla first got into the electronic cig-a-like business several years ago as an OEM customizing solutions for big tobacco companies. Simmonds recognized fairly quickly that the product was limited in its capabilities. He saw a huge shift to liquid products and fill-your-own tank systems.

At that juncture Gilla made an adjustment to its business plan to capitalize on the shift.

“It’s a shift from hardware to software,” says Simmonds. “Software being the liquid, hardware the piece that’s coming in from Asia. Obviously we’re not going to compete with the Koreans and the Chinese in making small electronic systems.”

A lot of mom and pop businesses have started up across the US and Europe. Bottling product, mixing and creating. A high number of these small shops moved onto the market very aggressively in the last few years. Gilla saw the opportunity for acquisitions and began to build a consolidated portfolio of brands for the liquid space.

A year ago Gilla bought an OEM manufacturing platform for bottling that keeps the lights on and has helped Gilla acquire a portfolio of brands, consolidate and realize efficiencies in operations, marketing and sales.

“Since last year we’ve bought four companies and added six brands and are adding brands organically with our own mixologists and the team on staff,” says Simmonds. “We’re approaching the market on an international basis as opposed to any limited jurisdiction like the US. It’s a global play that includes the US, Europe, South Africa and Asia Pacific.”

Retail Supply Chain

Big tobacco has seen its largest declines over the last few years and there are several reasons. Smoking out of doors. Tougher new rules and regulations around smoking. And some of the significant declines are due to e-cigarette use.

Wells Fargo analysts have projected that by 2025 e-cigarette sales will be equal to combustible cigarettes.

“That’s not necessarily to say that e-cigarette sales will get to the US$90B figure in revenue a year in America,” says Simmonds. “Rather, that combustible cigarette sales are going to decline even sharper over the next ten years.”

The retail vaping industry, on the other hand, has been growing rapidly and is fast approaching 12,000 vape shops in the US and 20,000 worldwide.

The result is a supply chain that is a unique and an entirely new retail network.

Gilla saw the opportunity to go into the industry and make the supply chain more professional, efficient and well-managed. In the process, the retailers have become part of the Gilla phenomenon.

A partnership with Gilla’s customers includes providing cost-effective marketing, displays and branding on a mass scale.

“The margins are high enough that we are able to make the marketing and branding complementary,” says Simmonds. “It’s a little bit like buying enough of a brand name beer and they throw in marketing and umbrellas. Gilla helps with infrastructure needs, supply chain needs and we make sure they are getting product to the ultimate consumer on time.”

The tobacco industry is about brands and distribution with millions of retail locations. Convenience stores sell more basic products including cig-a-likes. That’s where the investment is and products are needed that can be pushed through the existing distribution system.

Distribution & Market Development

In the e-liquid business, where brands sell at a higher price and premium products call for direct sales acumen, vape shops are opening new doors with custom solutions that meet the wants of a whole new breed of clientele.

Gilla plans to continue to penetrate these new markets, while managing the growth of its more mature US customer base.

As for branding, Gilla products are mostly made in the good old US of A. The cache that comes with the allure of made in America certainly helps with branding, exposure and getting established in world markets.

Simmonds’ long term strategy involves continued market development and careful compliance with regulations, working with local companies to make sure new products comply.

“Gilla is starting to see a shift to our products in new markets,” says Simmonds.

The company sees security in having a multi-jurisdictional approach to marketing its products. And from a consolidation standpoint wants to acquire brands with a unique market penetration.

“This is a totally unique opportunity to participate with us in a global venture in a completely new, fast growing industry,” says Simmonds. “It’s a consumer product with a big upside. Our user base is being provided the opportunity to invest in the business as well, so we think Gilla can be a flagship company for the entire industry.”

Business

How to use data to protect and power your business

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How to use data to protect and power your business 1

By Dave Parker, Group Head of Data Governance, Arrow Global

Employees need to access data to do their jobs. But as data governance professionals, it’s our job to protect it. Therefore, we must perform a fine balancing act to weigh robust data protection against the productivity of workers who need the data to maintain business-as-usual working processes.

Data grows exponentially, and most organisations will admit that they simply don’t know what data they have, where it is, and the controls that exist around it. This creates 2 challenges:

  1. Burgeoning amounts of unstructured data makes the business increasingly vulnerable from external attackers or internal data breaches.
  2. Because data is the key to understanding a customer’s wants and needs, if the business can’t identify its data and unlock its value, it’s at a competitive disadvantage.

As a European investor and alternative asset manager, here at Arrow Global we take care of £50bn of assets and own a data estate exceeding 160TB. How we manage our data is key to our success. We understand the difficulties involved in opening up environments to allow people to work productively, while at the same time locking them down to protect our organisation.

When it comes to analytics, I believe that Arrow is highly proficient because we employ a talented team of data scientists. But even for us, the sheer volume of raw and processed data, that resides in both our structured systems and unstructured data repositories, has the potential to put our business at risk.

We know there’s always more that can be done to strengthen our security posture and ensure regulatory and contractual compliance, while at the same time using our data to drive the business forward.

Data protection isn’t just about compliance

For many organisations, data protection has centred on demonstrating compliance with the GDPR. At Arrow, our efforts have gone one step further to include our contractual exposure.

Being a more mature data organisation, we had previously tried to develop an application in-house to manage our data estate. However, with 160TB across the company in production data alone, we simply couldn’t achieve the scale we needed to handle the sheer volume of data. Of course, the volume is just the start – once you know what data you have, you then need to be able to categorise the data and put it into a structure, so the business can analyse it for a specific use case.

We knew we needed to go to market to find an industrial-strength data discovery product to replace our in-house application. By aligning our choice of product to our overall IT and change strategy, meant that ultimately, we ended up with a far better outcome than we’d anticipated.

Position data as both a risk and an asset

Data touches every part of an organisation, so when it came to building a business case for buying-in a data discovery software platform, we approached it in a way that would speak to different people at the same time. We did this by posing the question:

“What do we want to do with data in a way that is GDPR-compliant, contractually-compliant and enables us to better service our clients?”

These are the black and white tests of data governance – to recognise the importance of securing and protecting data. They’re applied in a way that enables us to commoditise data and use it to drive the business forward, by forcing us to consider how we would use the data – for example, creating value-based pricing for our clients.

In aligning the business case to initiatives that were already priorities within the boardroom, we knew that we’d gain the attention of the senior leadership team and it would be easier to get the buy-in and budget we needed. And in the end, everyone wins – we get what we need to protect the data, and the business gets to distil the data’s value to better meet our customers’ expectations.

Dave Parker

Dave Parker

Get visibility of data at scale

For us, things got really exciting once we were able to see all of our data at scale. We chose Exonar because it allowed us to discover our data in ways that other products couldn’t. And the interface between the user and Exonar meant that everyone – both technical and non-technical users – could understand the technology and the findings it revealed.

When we saw exactly what data was in the estate, where it was and who had access to it, data security became much easier and the risk of data being compromised was dramatically reduced. We can see exactly where the vulnerabilities are and restructure how our data is stored to strengthen security. Then over time, we can use search, workflow and analysis to optimise the infrastructure and continually identify new areas to improve.

Commercialise the data

From a wider-business perspective, once people can see the data, they can start asking “What if…” to query it and distil its value. But it’s more than just the data itself. It’s not uncommon for data relating to the same thing to exist in unconnected systems across the business. For example, customer interactions and incidents or events.

Exonar is capable of joining the dots in disparate data sets. By stitching these data sets together, we can get a better overall view of our customers and use the outcomes to think of new, different or better ways of serving them through enhancing or adapting our offerings.

Why other financial services businesses should also take a smarter approach to data

  1. By changing the way you approach data, you can use it to protect and power your business and the people you serve.
  2. By positioning data as both a risk and an asset, you elevate its position to give it priority in the boardroom. Ultimately, it’s data that helps the business make informed strategic decisions about how to strengthen its competitive advantage.
  3. By gaining visibility of data at scale, you can see exactly what data you have and where it is. This gives the business confidence about the actions needed to ensure it is secured in both a regulatory and contractually compliant way, and that people are doing the right thing with data at all times.
  4. And joining different data sets provides you with a single view of ‘X’ within your data, no matter where it is. Helping to support your wider-business strategy and priorities, it gives you the information you need to secure a business advantage and generate value.
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How business leaders can find the right balance between human and bot when investing in AI

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How business leaders can find the right balance between human and bot when investing in AI 2

By Andrew White is the ANZ Country Manager of business transformation solutions provider, Signavio

The digital world moves quickly. From keeping up with consumer behaviour patterns, to regulation and compliance, the most successful organisations are always on the cutting-edge of technological developments.

However, when it comes to investing in artificial intelligence (AI), a hard and fast strategy does not guarantee a top spot amongst the league of tech greats. Instead, it pays to take a considered approach to balancing reliance on automated processes with a human touch. Why? Because creative and strategic thinkers are the true propellers of innovation; automation is simply the enabler.

The International Monetary Fund (IMF) developed the ‘Routine Task Intensity’ (RTI) index as a measure of which processes are likely to benefit most from automation. According to this metric, jobs requiring analytical, strategic, communicational and technical skills score low on the RTI index, while simple, repetitive tasks scored highly.

The lesson for business leaders here is simple; your digital investments are just as important as your stake in talent. When deciding which processes to automate, start simple, and remember to value the skills and potential of your people.

Keep customer-centricity at your core

Customer-centricity means that every business decision, dollar spent and new hire is centred on one question: how does this benefit my customer? Investments in AI are no different. To be truly successful, they must have a customer-focused outcome.

Where companies get this wrong is by implementing cost-saving measures or ‘copy and paste’ software that fails to improve the customer experience – often having the adverse effect.

Take the virtual chat-bot, for example; if implemented poorly, it can send your customers into a frustrating and seemingly infinite cycle of dead-ends. The modern consumer is far too digitally savvy for this shortcut, and will quickly move onto the next merchant offering a more seamless customer service experience.

To guarantee your investments are delighting rather than infuriating your customers, it helps to take an outside-in perspective of your business processes, aided by Customer Journey Mapping (CJM).

Before you commit to digital investments, CJM can trace and map each customer touchpoint, signalling pain points or conversion rates throughout their journey. These data-driven insights lead you to the areas that would benefit the most from automation, instead of implementing a broad band-aid solution.

Avoid the ‘set and forget’ method 

When investing in enterprise-wide AI, the ‘set and forget’ method rarely works. Real transformation requires an ongoing dedication to refining and improving AI-driven processes, as well as adapting them to the evolving needs of your customers. This is the best way to achieve customer loyalty, by proving that your organisation listens to, and understands its users.

A human perspective is invaluable here, paired with process mining – a method that thrives on finding process inefficiencies – to create a consistent feedback loop of improvement.

During periods of uncertainty, customer loyalty is everything, so aim to protect it at all costs.

The power of your people

The rise of automation can be linked to the corporate world’s obsession with speed and efficiency. However, the psychology behind this goes deeper than being the biggest and fastest producer; it’s also about reallocating resources into attracting and retaining the brilliant minds that drive companies into the future.

When communicating digital change, it’s critical to highlight the valuable impact AI has on augmenting jobs; removing the burden of mundane, repetitive tasks and allowing for more strategic skill-sets to shine through. For lower-skilled workers, invest in upskilling or re-education where possible.

Successfully rolling-out digital transformation plans means that every employee across all tiers of your company understands the value of AI. The starting point here is education to achieve buy-in. Change communications must be accessible, constructive and value-focused, supported by key culture influencers who champion automation within teams.

Enterprise-wide buy-in is an important element of refining and improving digital processes, as cross-functional collaboration can offer valuable insights into common pain points or inefficiencies ripe for automation. Supported by process mining, collaboration provides a holistic view of how each investment will impact other processes. There is no point investing in automation that streamlines one process and makes another more people-centric, so be sure to take a balanced approach to your investments.

Remember, AI is not about creating an army of robot workers; it’s about increasing efficiency and productivity so that an organisation, and its people, can work smarter.

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Are you a fighter or a freezer? The 4 “F’s” of Surviving Danger

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Are you a fighter or a freezer? The 4 “F’s” of Surviving Danger 3

By Dr.Roger Firestien, Author of Create In a Flash.

The fight, flight, freeze survival response – or FFF for short – is designed to mobilize our brain and body to fight an enemy, run from a tidal wave or freeze to hide from a predator.

FFF is how humans react when they encounter a dangerous situation. It is a primal response that happens instinctively even before we are able to think about the situation we are confronting.

The FFF alarm causes our brain to focus on negative memories, probably to scan them to avoid repeating dangerous situations and negative outcomes.  We get tunnel vision as our pupils dilate to increase our focus and long-range vision, but as a result we lose our peripheral vision.   

Humans use the FFF response and so do organizations.

When organizations encounter dangerous situations, like, say, trying to survive a global pandemic, they can respond by either fighting the situation, fleeing from the situation, or freezing and waiting for the situation to pass.

I would like to propose a fourth strategy for organizations to deal with a danger like the pandemic. It is the fourth “F.”  The farm response. More on that later.

What kind of organization is yours?

The fighter organizations were the ones that fought the idea of a global pandemic or pushed back against the research that reported how serious the virus was.  Think of the meat processing plants that didn’t provide proper protective gear or the religious organizations that refused to take a break from large services.

The results were catastrophic for the organizations and deadly to the employees and worshippers.

It is pretty easy to identify the fleeing organizations.  You don’t see them anymore.  Unfortunately, this is the organization that just doesn’t have the resources or the energy to fight.  You will recognize them by the “For Rent” signs in the windows of the buildings they used to occupy.

The organizations that freeze  are a little more difficult to identify.  They are still around but are frozen by fear. They are the organizations that, although they are in a position to move forward, are too frightened to take a risk or even look at the periphery of their business. Their tunnel vision blinds them to opportunity.  The freezers hide and wait for the danger to pass.  They are the ones who miss out on possibilities.

For example, if you are in the business of supplying concessions to sporting events, airports and national parks, your business is in deep trouble now. So, what are some ways to keep people buying food and drinks with so many venues closed?

Dr.Roger Firestien

Dr.Roger Firestien

Many national parks are now open and visitors need to eat.  How can you sell food while supporting social distancing? Answer: Sell picnic meals to your patrons.  And, sell a blanket that commemorates the park that diners can spread out and have lunch while social distancing with their families. Then, they’ll keep the blanket that reminds them of their visit to the park.

Sound like a good idea? It sure does. You can keep your park concession business, allow people to social distance and add to your product line with that commemorative blanket. Did the company implement the idea? Unfortunately, they did not. They froze and missed the opportunity.

However, businesses are finding ways to optimize their organization and capture opportunities. They are the farmers. The farmer organizations study the situation, just like farmers study the weather and the land. They look at the resources available to them and get to work.

Farmer organizations pivot and get creative.

Distillers, who before the pandemic, were making vodka, whiskey, gin and other spirits quickly changed their operation from distilling booze to distilling sanitizer.

Telemedicine, which had limited acceptance before the pandemic, almost immediately became the accepted way to deliver care.  Now, the doctor comes to you.

Fitness trainers are conducting their sessions via Zoom or in person outside on sidewalks in front of their gyms so they can social distance.

My favorite ranch, SK Herefords, sells their beef at local farmer’s markets in the Western New York area. This spring when the large packing houses shut down and grocery stores were limiting the amount of beef customers were able to buy, my farmer friends were there at the markets with locally produced farm-raised beef.  Sales soared and demand skyrocketed.

Why? The farmers were ready.  They used their resources and were not afraid to optimize them in a rapidly changing and volatile environment. Farmers live with constantly changing weather conditions and market prices and are accustomed to rapid change.

To operate with constant change, all of us, like farmers, need to be constantly creative.  Phil Keppler, my philosopher farmer friend from SK Herefords says, “Creativity helps you to not look at things as a problem. It’s trying to find the solution – and that’s the exciting thing about it. Things aren’t problems anymore. It’s just difficult situations and you’re trying to find a solution to that situation.”

A good mindset for what our world is experiencing now… it’s a difficult situation and we are creating solutions daily.

Fight, flight, freeze or farm. What kind of organization is yours? And, what can you learn from “the farmers?”

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