A walk on the Flexibility wildside

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I’m an adventurer at heart. I’m comfortable in big cities of the World, but it’s fair to say that the outdoors are my second home.

People who aren’t adventurers, think adventurers must be miserable. And never content with what they have. My view, and I know I don’t necessarily speak for other adventurers, is that adventurers do appreciate the novel and the familiar. We love our families and our friends. So much so that we try to make both groups bigger. We invite others to make new adventures with us. If we’re wise, we accept it, when they don’t necessarily say yes.

The spouses and children of military or emergency services workers, come to accept that part of what makes their father or mother that military or emergency services person, isn’t to get away from those they love. Instead, it’s a deep-seated part of the adventurer’s life to do other things. For their country, for their community, for themselves.

In the last few years, I feel lucky enough to have walked a novel path along the flexibility (FL) journey. Like those who travel to experience other cultures. What I can say is that the further I’ve travelled on the FL journey, the more I’ve found out about flexibility that there is to be discovered, made sense of and described to others who might be interested.

I discovered soon after I started along the FL journey, that it seems to come in two types, twice over. There is business flexibility (BFL) and personal flexibility (PFL). There is also mental and physical flexibility.

I also quickly came to the realisation that flexibility is like maths for an engineer. Language for a lawyer. Health and strength for an athlete. Or a Swiss Army knife for the army and civilian alike. In other words, it’s a useful toolkit to solve multiple problems. Ones that relate to (personal) growth and uncertainty (resilience & risk management) especially. Hopefully, lots of other people have come to, or are coming to this realisation too.

It follows that flexibility thinking is about how you use the FL toolkit. FL thinking can help you get out of a rut. To bypass an impasse. Or to redirect a moving vehicle away from driving over the cliff edge.

By getting into the habit of consciously practising personal flexibility (PFL), it can help you in business. And visa versa. Because many of today’s problems are complex, because the costs of complexity are high, because markets are complex and because bureaucracy often gets in the way of well-intentioned growth, we need to move from not using flexibility or flexibility thinking. To instead use both FL and FL thinking together to solve problems.

Lastly, the Fisccollection collection of blogs concentrates on personal flexibility in its various forms & applications. Just like with a multi-page food menu at a restaurant, if you’re hungry every day and you like to explore new choices, the ‘flexibility menu’ of these blogs, ought to help.

Simon

Making Judgements and Personal Flexibility

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A work colleague told me you shouldn’t judge people.  The trouble is, our economic, political and legal systems depend on someone judging something. Judgement of a chief exec’s ability to build customer support and create shareholder wealth. Voters on Election Day judging the government and its leader’s performance to date. Jurors deciding whether someone accused of a crime is guilty, beyond all reasonable doubt. We even make a safety judgement, when we let another person drive us somewhere in the car.

So if at times, we have to judge, does having more personal flexibility (PFL) make for better judgements? Ones that are fairer or more accurate?

Take a moment to think about how you make a judgement. Is it:

  1. First impressions rule ok.
  2. I’ll stay unconvinced until you prove it to me.
  3. I just don’t believe the so-called evidence you’re providing and serving up more of it won’t change my view (I suspect you’re lying).
  4. I’ll go with what I think is the most moral option.
  5. Which option will benefit me the most?
  6. Which option is the least risky?
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So how can Personal Flexibility help? One way is to select from a wider set to tools, on a case-by-case basis. In other words, don’t just apply one of the above approaches to all situations needing your judgement. In more other words, first judge which approach to use for the situation at hand. Maybe try making a second judgement (of the same situation) using one of the other approaches. See if you get the same result. If not, try adding a third approach and go with two out of three. If you face a really tricky situation, where you have to make a judgement call, apply all of the above, putting different weighting’s on the approaches if you have to. And add up the overall score (for or against).

Another way is to make a judgement. Observe the result with an open mind, And then change your judgement if need be. Changing your judgement isn’t weakness. Instead it’s evolution. Smart researchers who go on to develop wonder drugs, clever engineering solutions, or win Nobel prizes, aren’t afraid to evolve their theories if need be. Brave and respected politicians likewise.

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A further way to decide is the ‘Benjamin Franklin’ approach. Write down a list of pros and cons. Then go with the overall result, taking into account that some on the list might be significant and others minor (split each list into significant and minor items if need be).

If you find these blogs useful and meaningful, feel free to tell others.

Simon

Household Budgeting and Personal Flexibility

Firstly a caveat: this particular blog isn’t meant to offer specific financial advice to the reader about what investment products or investment classes to invest in. Readers should seek professional advice to help them understand the risks and choices available relating to financial products made available by particular providers.

What is a household budget?

It is simply looking at a period of time, such as the next 12 months. And listing both household income and expenditure over that period, with a reasonable degree of accuracy. If there is little accuracy, the list is merely a dream.

Secondly, try not to confuse precision with accuracy. Precision might estimate items on the list to the nearest penny. But that doesn’t mean those numbers are accurate. Accuracy is about being broadly right (to the nearest one thousand dollars or pounds say).

Fixed costs and volatile costs

Some household spending items are easy to estimate. And won’t change for the foreseeable future. For example, agreed mortgage payments, or room rent.  Others are inherently uncertain. For example, repair costs. Or the earnings & duration of the next ‘gig’ for gig workers.

Volatile costs are a form of uncertainty. And uncertainty can be managed by improving your personal flexibility (PFL). See my blog on ‘Personal Flexibility and Uncertainty’ for more on this.

When you put together your annual household budget, try to identify which items are fixed (reliable) and which line items are volatile. How volatile? Plus or minus 20% volatile? If there are lots of volatile items and the level of volatile (plus or minus) is significant, you could usefully do a ‘best case’ and ‘worst case’ version of your expected budget. Then as you monitor your actual progress against your budget during the year, you can start to take steps. For example, if your household budget increasingly moves towards the worst case version, then as soon as possible, start cutting back on discretionary spending. Or increase the income sources. Likewise, if the actual budget increasingly moves towards the best case version, try to actively save those extra funds ‘for a rainy day’. By increasing your household savings, you are making your PFL stronger.

Lines of credit

It is tempting to use your lines of credit (bank account overdraft or credit cards) to bridge the gap between household income and spending. Try to resist living your life on credit. That resistance will save you money. And increase your PFL, by giving you more short-term options if you need money in a crisis.

Budgeting for time-poor budgeters

The household annual budgeting can be as much of a chore as you want to make it. For my own household budget, I spend as little time preparing & monitoring actual spending as I can get away with. And it certainly isn’t itemized to two decimal places of precision!

Budgeting for big ticket items

How do you budget for big items on your annual household budget? The solution is to slowly save up for them. And buy them when you can finally afford to. Or to use bank loans to buy them. And pay off the loan at a rate you can comfortably afford over time. You’ll need a good credit history to get a bank loan, so bear this in mind.

You will have more personal flexibility, if you slowly save up (no interest costs) to buy the big ticket items. Perhaps think about taking out a loan to only buy big items that will go up in value themselves over time. But where you get a benefit from them every day. For example, a property comprising a home on some land you own. That said, buy at a good price and try not to buy land in an area prone to flooding, coastal erosion, hurricanes etc to reduce your risk.

Quick wins and small triumphs

Try if you can, to have some items in your annual household budget that give you & your family some quick wins and small triumphs. You can’t live your entire life saving up for the things you want. And never actually see any benefits along the way.

Single benefits and family benefits

Try if you can, to include some items in your household budget that benefit the whole family. Not just one or two members. It’s a bit like in the workplace, if the employer offers a pension scheme, all staff can benefit. If they only offer childcare support, or a commuter train travel loan, staff will benefit unevenly.

Time and money trade-offs

To some extent, budgets are a trade-off between time and money. For people who are time-poor but money rich, they pay for more support services and that is reflected in their household budget. For those in the opposite position, they have more of a do-it-yourself culture and save money by say growing their own food, doing childcare inhouse and cooking their own meals. Be realistic about your budget and what trade-off will work for your household.

Budget trade-ons versus budget trade-offs

One way to improve your budget is to look for tradeons rather than tradeoffs. A trade-on is like a double benefit. For example by cutting back on expensive entertainment and doing some self-study instead, you increase your marketable skills (to earn more income), but save money in your household budget as well.

If you prepare a first version of your annual budget and don’t like the result, look for some trade-ons to make the budget more viable.

There tends to be a positive correlation between trade-ons and PFL i.e. the more of one, the more of the other is possible.

Lastly, if you find these blogs useful, please spread the word, so others can benefit too.

Simon

Managing Uncertainty and Personal Flexibility

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How does personal flexibility (PFL) help to manage uncertainty? First, let’s look at what uncertainty is and how it arises.

What uncertainty is

Firstly, uncertainty can be positive as well as negative. Why positive? Not knowing who your future soul mate is, or whether you will even find one, makes life exciting. And probably changes your behaviour for the better too.

Two kinds of uncertainty are:

  • The known unknowns. We might know the current membership of those we are related to by blood. What we don’t know, is exactly when that membership will change (births and deaths). Another version of this is the second-order unknowns. We don’t know the names of our children’s children if we haven’t had children of our own yet.
  • The unknown unknowns. This includes unconscious incompetence. We aren’t sufficiently aware that we aren’t equipped to solve a problem. We wade in and act. And then anything is possible!

Our influence on uncertainty can vary too.

  • A small intervention on our part, can have a large influence on the level of uncertainty present. For example, we visit our doctor/dentist before the effects of a persistent ache become a bigger problem for us.
  • The level of effort on our part can essentially match the change in the resulting uncertainty.
  • It might take a large intervention on our part, just to achieve a small change in the level of uncertainty in something we encounter – think of raising a teenager.

We might put in place some risk mitigations to deal with uncertainty. The trouble is that we aren’t so good at identifying if we have enough types of mitigations. Belt alone? Belt and braces? Belt, braces and seatbelt too? Belt, braces, seatbelt and airbags? We aren’t so great at judging the relative strengths of those mitigations either. That’s one place where personal flexibility is helpful – design, test, assess then modify.

How does uncertainty arise?

  • Unknowns can arise because of big external changes. War is declared. Brexit is activated. A massive natural disaster hits an area.
  • Unknowns can arise because of a lack of information. For example, customer demand for a new product can only be estimated. Until the market reaction is seen. And actual trends understood.
  • Unknowns can arise because of a lack of time. For example, time to research the facts and solve a mystery is lost, as new events create new crises that take priority.
  • Unknowns can arise because of attitude– progress is undermined due to bias. For example, people with control of certain information choose to discriminate and not make it available. ‘Need to know’ and early tip-offs are related examples.
  • Unknowns can arise because of volatility. For example, rescue services, trying to assess actual threat to life in a hurricane, is hampered while conditions of extreme turbulence prevail.
  • Unknowns can arise because of a lack of buying power to control or influence certainty. If we can’t afford to buy real options, it can be hard to acquire them.

How can personal flexibility help? 

Broadly, if you see more uncertainty emerging, increase your PFL to compensate. Widen your skill base and diversify your income sources. Teach your children to become more independent e.g. earn their own money. Or shop & cook for themselves.

In the UK, with uncertainty over the Brexit outcome in March 2019, some people are reducing their personal debt levels. Or stockpiling canned foods in the short term. Just in case.

PFL can influence the speed at which uncertainties arise or reduce. One idea is to use PFL to develop some ‘brakes’ and ‘accelerators’ on uncertainty. The point being that just like driving a car, you as the driver control the speed. A simple example is diversifying your income sources to act as a brake on the effects of economic downturn.

Avoidance (risk transfer) can reduce your uncertainty. Hedge some key risks. For example, with professional advisors, influential friends, or insurance products.

As always, if you find these blogs useful, feel free to tell others.

Simon

Real Options and Personal Flexibility

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What has flexibility got to do with options?

Quite simply if you have more options, you have more flexibility. In uncertain situations, or if you are somehow keen to grow (wealth, skills, influence, reputation, character development), having options is valuable.

Of course, having more options isn’t useful if you can’t make a decision when time is pressing. And having a set of options that aren’t relevant to the problem you’re facing isn’t particularly helpful either. Unless you can trade them for the ones you actually want.

What are real options?

They’re not as scary as they sound. Wikipedia says ‘a real option itself, is the right—but not the obligation—to undertake certain business initiatives, such as deferring, abandoning, expanding, staging, or contracting a capital investment project’. In the personal flexibility sense, real options are rights we have paid for in the past and hold.  If the conditions are right, they can be used (exercised) at some point in the future, to buy or sell something to benefit ourselves.  Or benefit those we choose to help.

There are a couple of different types of real options. Call options are options we have purchased in the past, that give us the right to buy something. Put options are options we have purchased in the past, that give us the right to sell something.

What are some examples of call options in our personal lives i.e. things we’ve paid for in the past that give us PFL in the present and future?

  • Loyalty points, or frequent flier points accumulated, that are still valid. Purchase qualifying items and you have the right to use the points to obtain discounts on future purchases.
  • Multiple passports (the legitimate right to citizenship in multiple countries). Pay the application fee and once the passport is issued, you then have the legal right to buy the same things the other citizens can buy.
  • Insurance policies with a claim excess. Pay the insurance premium, make the claim, pay the claim excess and the item will then be replaced.
  • Personal credit cards and overdraft facilities. Pay the annual account fee and any interest charges to access the credit amount.
  • Fitness, health and knowledge you’ve built up, if they qualify you for access to something fairly exclusive in the future, that costs money.
  • Physical and data security measures and investments made. Pay the fee, log your security breach event, pay for the investigation and hopefully damage will be remedied.
  • Divorce papers – once signed and the divorce lawyer costs are paid, the papers give you the right to legally marry another person (providing they’re not already still married).

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What are some examples of put options in our personal lives i.e. things we’ve paid for in the past that give us (or our loved ones) the right to sell and hence PFL in the present and future?

  • Trial period agreements.
  • Product warrantees, price-matching features and money-back guarantees.
  • Sublease clauses. For example, you rent a two-bedroom flat and there’s a clause in the lease agreement allowing you to rent out the second bedroom for financial benefit.
  • Your estate (once you’ve paid the solicitor to draw up your will). Ownership of this option transfers to the beneficiaries of your estate, upon your death.

Real options and student career advice

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In the general education system, little emphasis seems to be given to teaching students how to manage their real options. Then, when students graduate & join the workforce, they lack awareness about real options management in the workplace. Instead, at best, students receive advice from relatives, friends or teachers about getting a good education and working hard, to open up more life choices to them.

Perhaps too many young people learn from life experience – the ‘school of hard knocks’ (why doesn’t Western culture strongly preach the folly of learning this way?). And learn from repeat situations (once bitten, twice shy), that having choices is valuable.

What the young people need is more advice on how not to get bitten. And coaching to position themselves to have choices other than getting bitten. Young adults may also learn from observation – being inspired by designers to mimic the design flexibility that they see.

In the view of this blogger, one of life’s ironies is that for many young people, by the time they realise that older people’s advice to them on the above things is just as relevant today as in yesteryear, the consequences of have few options and choices is already hitting them hard.

In summary, holding real options in our personal lives, is a tangible form of personal flexibility. It follows that if we want to increase our PFL, we should accumulate real options in advance, in the areas of PFL that we want to improve.

Some areas to look at, if personal growth and uncertainty management are some of your goals; obtaining real options concerning wealth, skills, influence, personal reputation and/or character development. A key point is to build up an ‘options portfolio’ i.e. don’t just concentrate on obtaining real options relating to one of them.

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Periodically, we will use or ‘exercise’ many of the real options we hold, so another key point is to replenish our stocks of real options regularly.

If you found this blog helpful, feel free to tell others. Constructive comments are also welcome.

 Simon

Parenting and Personal Flexibility

Parenting is both complex and practical. Having raised two step children from the ages of 8 and 10 years onwards (now aged 21 and 23 respectively) and with the benefit of hindsight, I’d like to share some insights about how personal flexibility (PFL) can help people become better parents.

Like many parents, I’ve said things in the heat of the moment, that I wish I hadn’t said to my children. It’s a testament to their character that they saw the bigger picture. And thankfully saw me as a flawed human being, trying to become a better person and a better parent over time. It’s still a work in progress!

I’ve said to various people that the life change from not being a parent, to suddenly becoming a parent is huge, compared to the change from moving say from the parent of two children to three.

Becoming a parent is like a marathon. But with random sprints inserted into the event as well. The sprints arise if the parent suffers a momentary loss of focus on a young child and it gets into trouble. For example, at the top of some stairs. Or following a stranger away from a playground setting.

What kind of PFL helps for the parents of very young children?

The child’s needs are initially quite physical. Sleep deprivation for one or both parents is a problem, as the baby’s sleeping patterns and feeding cycles are short. And very different from those of the parents. The parents feel an enormous sense of responsibility for a tiny, defenceless individual, who is totally reliant on them.

Over time, the child’s awareness builds. It bonds with the parent(s), as the centre of its world. Progressively, the child becomes more active in exploring its world. It makes its wishes known. And more of its personality becomes obvious to onlookers.

Taking shared parental leave from the workplace (extra parental capacity) increases the PFL to cope with the initial demands of parenthood. Rooms at home have to be modified, medical checkups arranged, baby clothes, cribs, high chairs, car seats and baby strollers bought. in a PFL sense, these things help to build capacity, create options and manage uncertainty.

Part of the PFL challenge for the parents is not to overwhelm the young child. To create some structure, some reassurance and to set limits. To not be overly protective in shielding their child from exploring the world.

Probably, the parents are constantly adjusting their parenting approach to help support the child, as best they can. They are still discovering their child’s personality and its preferences – the things it likes and hates. The beauty of parenthood is that although no one is born an expert, you get to practise being a better parent every day (patience and endurance). A key message is that being a better parent comes from exercising some PFL along the way.

What kind of PFL helps for the parents of pre-teen children?

The child’s identity, passions, talents and abilities become clearer in pre-teen children Their friendship group develops beyond family members. School education becomes a feature of their lives. Their parents aren’t always present when they suffer mishap or injury.

Part of the PFL challenge for the parents is again, not to overwhelm the child with things it can’t handle. To create structure, reassurance and some kind of limits. To not be overly protective in shielding their child from exploring the world.

Parental PFL involves oscillating between support & stepping back to watch your child progressively forge its own path in the world.

What kind of PFL helps for the parents of teenagers?

Puberty kicks in, hormones fluctuate. And there is a constant tension between the teen wanting more freedom. But not being able to be fully independent. Progressively, the teen’s identity shifts to become not only a family member, but a member of its own social tribe of friends. Dating and relationships become a feature in teenagers lives. Social pressure to conform becomes intense.

For the parents, there is frequent and unpredictable challenge to their authority in many cases. The parents may feel underappreciated or unappreciated. The dialogue they used to have with their pre-teen child, may have become replaced by a sullen, tense battle of wills & values.

For the parents, PFL is aided by wider family support to both teens & their parents. Parents need to decide which battles to fight. And which ‘stylistic differences’ to concede. Another expression of PFL for the parents is in keeping an open-door policy to be there when the teen wants to talk. Somehow the parent has to keep an eye on the family ‘light at the far end of the tunnel’. While providing logistical support to the teen. And periodic emotional support too.

What kind of PFL helps for the parents of adult children?

Once into their twenties, perhaps graduating from university and/or becoming establishing in their first or subsequent jobs, the child has become a fully-fledged adult.

The biggest PFL issue for the parent is probably to re-establish a positive relationship with their child, on an adult-to-adult basis.

In summary, PFL is valuable at all stages of the parent ‘journey’.

If you find these blogs useful, please spread the word for others to read them and comment too.

Simon

Flexibility and Flexiscribes

It’s hard to talk about flexiscribes without first referring to flexibility. Flexibility like air, fitness or financial savings is invisible. But vital.

We go to great lengths to monitor our personal savings. We aren’t so good at monitoring our air quality, our fitness, or our levels of personal flexibility (PFL). Perhaps now is the time to change that.

Flexibility like fitness, savings, career options, or even a tidy house, is something that can dissipate over time. A university graduate or aspiring actor considering their first serious role, might have various choices about which area to specialise in. Further along their career path, they’re perceived to have become more typecast.

The key point is a simple one. That net flexibility in your life will disappear. Unless you try to replace it at a similar rate that it is disappearing at. Or better still, grow your net flexibility above the current level.

A device to replenish your flexibility is a flexiscribe. In other words, a flexiscribe is a mechanism that codes for flexibility. The coding might be automatic. Or only happen via manual effort.

For people of all ages, working in what they regard as a declining industry, or for people who might be at the tail end of their working career, perhaps thinking about an encore career, or doing flexible portfolio work, flexiscribes are probably of particular interest.

Ownership/control versus choice

Business range (choice) can help create personal flexibility. An example of growing choice is the range of rental services from businesses that are available to consumers – the rise of the so called ‘sharing economy’. But business range isn’t a flexiscribe for PFL. Access is firstly about entitlement, then choice. Therefore, access to the range is the flexiscribe.

Business flexiscribes helps create business flexibility (BFL). Likewise, ownership/control of personal flexiscribes help create personal flexibility (PFL).

A key general point is that by consciously thinking about creating flexiscribes, you increase the chances of flexibility occurring.

Regarding business and personal flexiscribes, what are some examples of each type? Some business flexiscribes operating in R&D businesses, or education (universities and high schools) might include the organisations:

  • having multipurpose rooms,
  • having multiskilled staff. In universities, the staff may be good at both research and teaching. Or be staff who are talented in two fields of research,
  • having high free cash reserves,
  • having flexible working practices and incentives. For example, project secondments. These will force new experience to emerge, which itself will encourage new skills development.
  • owning some intellectual property e.g. patents and trademarks that enable commercial success,
  • holding some real options – more about these in a later blog.

What are some personal flexiscribes? Firstly, if Personal flexibility can be divided into PFL relating to ‘be’ (personal identity and image) and ‘do’ (personal actions), then perhaps that’s a useful way to split out the personal flexiscribes too.

Some personal flexiscribes (things that code for PFL), relating to identity and image are as follows:

  • Continuing professional development (CPD) hours. By having to do a minimum number of training hours each year to remain registered with a particular professional body, it forces the person belonging to the membership body to develop new skills, techniques & knowledge. The advice of this blogger is to make at least some CPD training in areas transferable beyond your current sector & role. Ideally, invest in training that’s relevant to sectors where you have a good chance of working in the future.
  • Developing a strong CV and network of contacts. Both can promote your achievements and skills to date.
  • The daily work commute by train or bus. If your work commute is a decent length e.g. about an hour or more and you don’t have to cycle, or drive yourself to work, then there is enforced time available to build knowledge. Which itself builds flexibility. Building knowledge might be in the form of reading text articles, watching YouTube ‘how to’ guides, or listening to say Ted Talks on relevant subjects.
  • Personal savings. Clearly, if you can save some funds, your scope to access anything that money can buy will increase.
  • Family support. For families that help one another when things become hectic, or rally round when one family member suffers a set back, simply having that support creates more PFL for the person concerned.

Some personal flexiscribes (things that code for PFL), relating to ‘doing’ activities are as follows:

  • Working in the ‘gig’ economy. Typically, each assignment is different in scope, duration, location and the issues also vary. This variety encourages skills development and adaptability from the gig worker.

  • Doing volunteer work. Obviously you need to continue paying your bills. And maintain relationships with friends & family. Therefore the time commitment and the quality of effort you make is about achieving balance with those things. Because it is voluntary, the scope of activity is flexible and you have more power to direct how your time is used to gain useful skills and achieve impact, for a win-win outcome.
  • Renting rather than buying. Access to the rental, not the rental itself (choice) is the flexiscribe. Using the power of access, extra capacity is only rented when needed. Specialist items are hired at short notice for one-time events. People take advantage of ‘try before you buy’ offers, to manage uncertainty. A side question for the reader – if the ‘sharing economy’ is rapidly growing amongst both established and new entrant providers, e.g. in room rentals & transport, then business providers boost consumer flexibility. Is there then an opportunity for the reverse to also happen? To elaborate, in the sharing economy, the values of some consumers may emphasise; minimalism (small storage footprint), variety, instant access, group access and/or personal image not tied to asset status. Can those values be accessed & harnessed, not only to boost demand for business products & services. But to also code for business flexibility itself?

If you find these blogs useful, please spread the word for others to read them and comment too.

Simon