April 29, 2013
In your next meeting ask for a few minutes to go over ways to improve the bottom line.
When you hear leaders say that a new strategy is going to improve the bottom line, they are talking about net profit (sometimes called net income or net earnings) – because net profit is generally the last line, or the bottom line, on the income statement. Net profit is simply all revenues/sales minus all expenses.
So there are two fundamental ways to improve the bottom line: increase revenues (sell more) and/or reduce expenses (spend less). That sounds pretty easy – and sometimes it is – but more often than not strategies based on either of these goals can be difficult to execute and can have unexpected results. For example, sometimes increasing revenues requires making investments that might not earn a return in the near future – or at all. Likewise, growing revenues by raising prices could have the effect of lowering sales. Improving the bottom line is almost always the main strategy of a company.
Share this AirTran commercial in your next team meeting…
Watch the video above as a team and then answer and discuss the following…
In the video the boss says that he needs everyone to think of ways to improve the bottom line. What is the bottom line?
If there are two fundamental ways to improve the bottom line: increase revenues or reduce expenses… what do you think this underperforming office was doing?
As you think about our team’s top initiatives or projects… are they aimed at increasing sales or decreasing expenses?
If our boss called a meeting asked us to think of ways to improve the bottom line, what would you suggest?
Depending on your team’s role, it might be difficult to pinpoint how your team can impact revenues, but everyone can usually identify a simple way to reduce a cost or improve an efficiency. Encourage everyone on your team to use their business acumen to come up with a cost cutting measure. Explain that many simple ideas can combine to have a big impact on the bottom line.
Seeing the Big Picture:
If you and your team have the book Seeing the Big Picture (Greenleaf, 2012) turn to page 33 and read the section: The Bottom Line and Other Measures of Profit
February 25, 2013
We thought it might be fun to spotlight a different Acumen Learning employee every month!
For the month of February, I thought that I would start out by spotlighting the woman who is the glue that holds our company together. She is the kind of person that does everything and anything to make our company better, and is positive and fun along the way. She will bend over backwards for people to make sure they are on the right flights, and have everything they need in order to deliver successful training sessions to our clients. We don’t know what we would do without her!
Name: Sharon Biegler
Tell us about yourself in one sentence: “I am a getting-older-by-the-minute girl, who still thinks I’m young and trying to have fun.”
How long have you worked at Acumen Learning? 9 1/2 years
What do you do at Acumen Learning? Office Manager, AR/AP book keeping, travel coordination
What is your family at home like? ”Small- Just Steve, Kristen, Annie & Kellen and me – plus a dog. They are all a bunch of smart alek’s and don’t take things too seriously.”
What is your favorite hobby outside the office? “I love to ski and bake”
What is your favorite thing about Acumen Learning? “Working with fun, smart, hard-working people”
What is one word to describe the people at Acumen Learning? -”What else = Bitchin’ ”
Oh, and did I mention that today is her Birthday?? Happy Birthday, Sharon!
Be sure to watch the video below on how we at Acumen Learning say Happy Birthday to our employees.
February 22, 2013
For the uninitiated, financial statements can seem overwhelming. But they don’t have to be. The key is to understand that, unless you’re a CFO or a financial analyst or a commercial loan manager, you don’t have to understand everything in these statements to discover important clues about the health and sustainability of a company. Just like you don’t have to be a certified electrician with a deep understanding of the wiring digram in your home to turn on a light switch. Similarly, you just need to know which primary switches turn on the right financial lights – and how you, in your individual role, can help keep the lights burning strong by making smart decisions.
Watch this video from Kevin Cope, author of the bestselling book, Seeing the Big Picture:
Watch the video as a group in your next meeting and discuss the following…
- Kevin gives 5 reasons for understanding financial statements (you may want to list those 5 reasons on the board or tell your team to note the reasons as they watch the video). Discuss how understanding financial statements can benefit your credibility, career, and company.
- What did the Russian say when introducing Kevin? Do you think he’s right?
- Project your screen and navigate to your company’s most recent financial statements (or if everyone on your team brings their laptop, see who can find the company’s financials the fastest). The goal is for everyone to know where to find the financials.
- Bring a print out of your P&L, Balance Sheet, and Income Statement and 4 different colors of highlighters. In groups have your team highlight the connections between the three different financials.
- Discuss the path from Sales/Revenues to Shareholders. What part of the path seems to be the strongest? What part of the path gets the most attention from executives? What part of the path does your team have the most influence on?
- Bring a print out of your competitors 3 financial statements (or the financials of a company you admire) and highlight and discuss the path from Sales/Revenues to Shareholders. How does their path compare to your company?
Quarter after quarter, and year after year… you and your team should print out your financial statements and use your business acumen to follow the path from Sales to Shareholders. Pay particular attention to trends – how has the story changed from the last period or from the same period a year ago? If you work for a private company do this activity by choosing a public competitor or a company you admire.
Seeing the Big Picture:
If you and your team have the book Seeing the Big Picture (Greenleaf, 2012) read the first section of Chapter 7 starting on page 110: Deciphering Financial Statements and the Annual Report.
February 7, 2013
I came across this enlightening article by Jessica Lee called The Power of Positive Thinking and Business Success. She talks about how our mind is so powerful, and our thoughts control how we live our every day lives. Positive thinking can absolutely impact the success of a business. She goes on to say, “ The No. 1 rule that people tell us over and over again is not to believe in limitation. Don’t give in to negative thoughts. Belief in limitation creates limitation. These false beliefs block motivation and harvest fear.”
Limiting ourselves in the workplace can definitely make a negative impact in your day to day lives at the office. If we approach our business endeavors with “I can” and “I will”, then it will change our path to success. Jessica goes on to say that first we need to focus on ourselves. Make us the best version of ourselves that we can be. Don’t limit ourselves. Take responsibility for our actions, thoughts, and attitudes. Know that we have the power to change those things ourselves, but it is up to us to take those steps to change. She also talks about how we need to realize that we cannot control the outcome of situations, but we can control how we react to them. This is so important! And after we focus on ourselves, then we can focus on our coworkers. Help them. Motivate them. Support them. But most importantly, BELIEVE in them. Jessica says, “No matter how inexperienced they might be, no matter how difficult they might be, no matter what the circumstances are, when you begin to believe that people can achieve, they start to believe in themselves. They start to achieve. When you reach out from a place of willingness, things begin to happen. When you exude an attitude of enthusiasm and willingness, it can create immeasurable value to your workplace.”
I loved this article because sometimes in business we can easily be swept into a negative tornado where it’s hard to see a way out or a light at the end of the tunnel. But this article tell us that we don’t have to let the tornado take us down! Our attitudes and actions in the workplace are all up to us. The power of positive thinking is so important because it is contagious and people around us at our jobs will be able to feel our positive energy.
Read the full article here about The Power of Positive Thinking and Business Success.
January 29, 2013
For a different topic today, let’s talk about resolutions.
January 17, 2013
Richard Branson is not your average entrepreneur. At the age of 15 he dropped out of school and, despite suffering from dyslexia, went on to found Virgin Group, a business empire that includes airlines, cellphone companies, banks, hotels, health clubs and even a space travel business. He’s worth over $4 Billion and he owns his own island. In short, the guy is loaded… and he’s been knighted.
And so when we saw this answer to one of his Twitter followers questions it grabbed our attention:
Now when an über-rich dude admits to not knowing the difference between gross and net, that’s one thing… but it could be career suicide if you or someone on your team admitted to this in the wrong setting. So we’re here to help.
Commit this to memory: Gross is the total and Net is the part of the total that really matters.
Here are some ideas:
Gross is the total amount of fish in the sea, but all that really matters is how many fish are in your Net… this is how Richard Branson was first taught the difference between Gross and Net.
Your Net pay is how much money you bring home each month after taxes, insurance, and other deductions are taken from your Gross pay.
When looking at a P&L or Income Statement the most important measure is the bottom-line or Net Profit. For example, an executive could brag that her company’s Gross Profit was $100 billion dollars, but does that really matter if the company had over $150 billion in expenses?
November 27, 2012
So often in our attempts to get on the same page, we overlook the fact that organizations — like books — have many different pages. It’s how all of the pages combine to create the entire book, or the entire organization, that is most important. In your company (and most others), the various functions and departments (the pages) have different areas of focus.
It’s entirely appropriate for different functions to focus on the 5 Key Drivers (Cash, Profit, Assets, Growth & People) in different ways at different times. But with this focus, they need to make sure they are not sub-optimizing the whole. They must continually see the big picture and understand how their actions are affecting all of the drivers.
For instance, if senior leadership says that profitability is all-important this quarter and asks employees to identify ways to reduce costs, you should certainly follow that lead. However, you have to apply your business acumen to make smart, productive decisions. Cutting costs too much could adversely affect product and service quality, reducing customer satisfaction and leading to lower sales and… you guessed it… profits.
Apple’s recent management shakeup is a good example of two executives who were either focused on the wrong thing or too focused on one thing:
October 22, 2012
You and I both know plenty of bright colleagues and peers who have years of experience and know everything there is to know about their particular function—HR, operations, marketing, sales, engineering, or some other role—but who would rather have a root canal than to have to give an opinion or interpretation of the company’s latest financial results.
And yet, business is a NUMBERS game.
When you are seen as only focusing on your function because you don’t understand the numbers, you can quickly lose credibility. That doesn’t mean you need to magically turn into an accountant to do your job well, but it does mean that you need to acknowledge the important role that numbers play in business.
October 16, 2012
September 22, 2012
What do they say about cash? Cash is King!, Cash is a company’s oxygen supply, and our favorite from Al Shugart, Cash is more important than your mother. While we’re sure Al loves his mother, he’s making the point of how important cash is to a business. In fact, the number one reason start-ups fail is they underestimate how much cash they’ll need.
Cash is important to big business too. Take Ford and GM… prior to the recent economic crisis Ford went out and borrowed $23 billion dollars and set it aside. People thought they were crazy (they even mortgaged their iconic blue oval logo), but when hard times hit Ford had enough cash on hand to weather the downturn. GM on the other hand borrowed billions from US taxpayers, President Obama fired their CEO, and they declared banckruptcy because they didn’t have a strong enough cash position to continue their operations. In short…
The only unforgivable sin in business, is to run out of cash.
— Harold Geneen
August 16, 2012
Too often in careers, people become narrow in their perspective – entrenched in their roles. They focus on what they have to get done today or this week (tactical) and lose sight of the bigger picture (strategy). In other words, they do a good job… but they either do the wrong things, or they do the right things for the wrong reasons (think about it).
If you want to be the type of employee that management can’t imagine running the business without, you can’t be just another corporate robot. You have to not only be willing to roll up your sleeves and get the job done – you also need the perspective that will help you do the right things really well.
June 25, 2012
Established in 1951 in the aftermath of World War II, Japan Airlines came to symbolise Japan’s post war recovery with this aspiring mission statement:
We will not only transport people and goods to their respective destinations safely and on time, but will also bring peoples, their cultures and their hearts closer together as our contribution to world peace and prosperity.
Unfortuntaly on January 20, 2010 Asia’s largest airline by revenue sought court protection from creditors to grapple with a debt load of $25 billion, a level well above its cash flow. The airline would go onto to layoff over 14,000 employees, the CEO and board would resign, and the company’s stock would be delisted leaving shareholders with nothing.
Employees must exercise their business acumen set and achieve goals in order to accomplish the most important objective for any company: long-term, sustainable profitability to support its mission. Remember: No Margin… No Mission!
April 16, 2012
Acumen Learning has surveyed thousands of people and asked about their internal customers (the people they work with or serve within their organization). The results consistently show that departments and individual employees think they provide better internal customer service than they recieve. We tend to judge others by their actions, while we judge ourselves by our intentions. However, as with external customers, perception is reality.
Smart employees recognize that their colleagues are also their customers. And smart leaders think like Stephen R. Covey, “Always treat your employees exactly as you want them to treat your best customer.”
February 29, 2012
February 27, 2012
Most businesses try to satisfy customer needs and expectations. Other enterprises even make a conscious effort to exceed them. But truly successful companies achieve an even higher level of excellence, a more powerful form of competitive advantage. They anticipate the needs of customers and innovate to meet those future needs. Microsoft’s “Where do you want to go today?” campaign has practical financial relevance.
While it is critical to continually survey customers and other stake holders to determine their needs, recommendations, and desire for future products and services, that only tells you what the client is thinking right now. Customer feedback has limitations because people can’t always identify what it is they’ll want in the future. But strategically, you can’t plan for right now; you have to plan for the future if you want to ensure your company’s survival.
Effectively using the principle of anticipation and innovation is the ultimate competitive advantage. Dr. W. Edwards Deming, management and quality guru, said, “Innovation comes from the producer—not from the customer” and pointed out that no customer asked for a microwave oven. Henry Ford said that if he’d asked his customers what they wanted, they would’ve asked for a faster horse.
The innovative thinking of entrepreneurs—regardless of the size or maturity of their company—leads the consumer marketplace. Pocketsized cell phones, GPS navigation, iPods, ebooks, and tablet computers are just a few examples of game-changing product innovations from producers over the last decade.
What happens to companies that fail to anticipate or meet customer needs? Can a big, strong, powerful, dominating company fail to anticipate in its industry, fall from competitive grace, lose leadership position and opportunities, and become relegated to “also ran” status?
General Motors, Ford, and Chrysler dominated the U.S. and international passenger-vehicle markets for decades. In 2008 GM lost its top sales position to Toyota, and in 2009 GM and Chrysler received multibillion-dollar bailouts from the federal government and filed for bankruptcy. In their 2008 fiscal years, GM lost $31 billion and Ford lost $14 billion. In 2007 the majority interest in Chrysler was sold to a private equity firm after its parent for nine years, Daimler AG, tired of its continued losses. In June of 2011, the U.S. government sold its remaining stake in Chrysler to Fiat. Why have the Big Three declined so dramatically? Because over the years they have consistently missed the customer demand for cost-effective, fuel-efficient, high-quality cars, trucks, and SUVs that exhibit appealing style and features. But the Japanese automakers anticipated American consumer desires and have captured major market share.
In September of 2010, Blockbuster filed for bankruptcy. In February of 2011, Borders filed for bankruptcy. These once dominant organizations didn’t anticipate the shift in how people would view movies and read books. History is full of many more examples of companies that failed because they failed to anticipate. As Albert Einstein said, “The significant problems we face today cannot be resolved at the same level of thinking we were at when we created them.”
Of course, on the flip side you have companies like Apple. Not surprisingly, Fortune and Fast Company both listed Apple as the most innovative company in the world in 2010. Nobody can anticipate customer needs and desires better than Apple, and as Fast Company put it, they chose Apple for “dominating the business landscape.”
Anticipating customer needs is essential for product and service innovation. The Ritz-Carlton has a deliberate program of data capture and analysis after each guest’s visit, information they use to anticipate the needs of returning guests. From desired room temperature, to type and firmness of pillow and mattress, to preferred morning newspaper, fulfilling guest needs is the focus not only of the current stay, but for every future stay.
What innovative ideas can you contribute to your business in anticipating customer needs?
February 8, 2012
January 30, 2012
Kevin Cope, the owner of Acumen Learning, has the tradition of a company dog pile for each employee birthday boy. On his 50th birthday, out of justified fear of getting taken down, Kevin hired 2 bouncers and his three sons to protect him. Unbeknownst to his employees, they were to keep him from hitting the couch. But Acumen Learning men are not to be beaten, and with all the energy of honoring their boss, Kevin was taken down.
December 22, 2011
Like worthy causes, worthy projects require our time. Over the last year I have spent time writing, editing, and re-editing my very first book, Seeing the Big Picture. And I’m happy to announce that it will be available in bookstores this spring.
As a best selling author and business executive, I knew from the beginning that I wanted Stephen M.R. Covey to write the Foreword. I was hopeful that 1) he’d like the book enough to write the foreword and 2) that he’d be able to capture the crux, the essence, the heart and soul of the “what” and the “why”. What is this book about? Why is this book important? Stephen wrote a great foreword that went beyond my expectations – I’ve shared it below.
And I’d like to share my book with you and your colleagues. I’ve set aside a limited number of copies for our fans… simply click here.
Seeing the Big Picture: Foreword
Stephen M. R. Covey,
Author of New York Times bestseller The Speed of Trust
I strongly believe that the first job of any leader is to inspire trust. Whether that leader is a surgeon leading a team through an intricate medical procedure, an executive leading a team in implementing a strategy, or a quarterback leading a football team to a comeback victory—it’s trust in the leader that inspires others to willingly choose to follow.
So what inspires trust? Trust is the confidence that emerges when character and competence converge. If I were questioning whether or not I needed surgery, I wouldn’t trust a dishonest and self-serving surgeon—no matter how competent he or she might be. Nor would I trust a quarterback who’s unable to make plays or deliver results—even if he has impeccable character. But when I see the consistent demonstration of both character and competence, I do trust. And Kevin Cope, the author of this exceptional book, is a person who consistently demonstrates both—and is a person I trust immensely.
Kevin is a long-time friend and confidant. As such, he listens empathically and offers sound advice when I ask for it. He is also a business colleague who worked with me for several years in a time of unprecedented business growth, opportunity, and challenge. In that role, I have seen him time and again roll up his sleeves and find a way to get the job done superbly well. While I wouldn’t trust Kevin to quarterback a fourth quarter comeback (believe me, I’ve played flag football with him!), and I definitely wouldn’t trust him to perform surgery on me (he’s not a doctor), I absolutely do trust Kevin’s ideas on business, organizations, and people. He’s earned that trust through a demonstrated track record of character and competence—particularly in the area of business acumen.
In fact, it is because of my trust in Kevin in these areas that I strongly encouraged him to write this book. His “five drivers” model and his ideas concerning business are simply too good—too valuable, too insightful, too clear—to not share. Kevin has the gift of being able to take complex issues and make them simple. Never is this gift more needed than in the world of business acumen, particularly regarding how business works and how organizations make money and successfully grow. And when it comes to understanding how business acumen can transform an individual—and, in turn, an organization—there is no one I trust more than Kevin Cope.
But enough said about my friend Kevin; now let’s talk about you. You’re picking up this book because you likely work for a business or for some type of organization that needs to operate on sound business principles. Now just because a person works for a business doesn’t mean he or she fully understands business. You and I both know plenty of bright business graduates who can’t quite seem to apply that knowledge in relevant ways that create value for the business. We’ve all run across colleagues and peers who have years of experience and know everything there is to know about their particular function—HR, operations, marketing, sales, R & D, or some other role—but who would rather have a root canal than to have to give an opinion or interpretation of the company’s latest financial results.
We’re also aware of those who think they know business when all they really know is the jargon of business—often number crunchers who, as Oscar Wilde put it, “know the price of everything but the value of nothing.” We likewise see countless passionate entrepreneurs who are certain they understand business, but start companies that fail to gain any traction and end up not even getting off the ground. In short, just because a person is “in” business doesn’t mean that person “gets” business. That’s where this book comes in. It’s the best book I know to explain how business really works and how organizations make money. It’s actionable. It’s simple without being simplistic. And it’s written in an engaging and insightful style.
So if you’re that business grad or entrepreneur who can’t put your finger on why success seems to elude you… or that functional expert with years of experience who’s tired of being overlooked when your company presents new career opportunities… or that numbers person who’s wrestling with how you can become relevant to those who don’t look at the numbers in the same way you do… or—like me—an executive who’s looking for a quick reference field guide to help you focus your team on the simple fundamentals of business success… this book is for you.
Whatever your situation—and whether you’re just getting started in business, trying to get reenergized about your business, or actually running a business—I strongly encourage you to read Seeing the Big Picture and carefully consider what Kevin has to say. I am convinced that doing so will help you become a more competent businessperson. And if you combine that competence with strong character, you’ll inspire your peers, your team, your boss or your CEO, to trust your decisions. They’ll come to see you not only as a leader of people, but also as a leader of the business. And that’s what good business acumen is all about.
November 17, 2011
Harvard Business Review recently described that business competition used to be like traditional theater; where the actors had clearly defined roles, and the customers paid for their tickets and passively watched what takes place on stage. Now the scene has changed and is more reminiscent of experimental theater of the 1960’s and 70’s where everyone and anyone can be part of the action. A perfect example is the recent debit card fee debacle that was never implemented because of customer outrage.
I recently heard a Banker use a prepositional phrase to describe the condition of the Commercial Finance Business: “Simply put, we are over-regulated, and under capitalized”.
While that may be a quick explanation as to why his organization has seen dips in operating profit margin, and return on assets, I wondered if I were to truly take the time to look under the hood of the organization what I would find? How is his organization doing in terms of client retention, established market expansion, emerging market penetration, customer service, competitive advantages, additional product offerings, etc?
Certainly times have changed since September of 2008, and according to a recent CEO survey published by Price Waterhouse Coopers, 84% of corporations have changed strategies within the past two years. But are external factors, such as regulation, really as big of a head wind for top and bottom line revenue growth, as many seem to think they are?
While it is true that regulators have cracked down on “Asset Quality”, regulators are not preventing banks from offering lower interest rates, reducing fees to incent credit worthy borrowers, speeding up turnaround times, providing faster credit approvals, etc.
CFO magazine published a study last year that 46% of companies’ are “more likely” to change some or all of their banking partners. While CFO’s confidence in their banks has increased, data points still suggest that more are ready to switch. The question begs, how well do banks know their people, involve their customers, and how well do they attempt to align strategies to be mutually beneficial partners. I submit that much can be gained that has been lost in those areas.
We teach that People are at the center of our 5 Drivers business model. Simply explained, people means: good employees connecting with their customers. Whether you’re a health insurer dealing with medical expense ratios, a med device company trying to wrestle with product to market, or a bank trying to adhere to asset quality standards, the better you know your customer, the more adept you can become at navigating the regulatory waters in pursuit of growth.
October 10, 2011
My first real job was for a struggling software company named Novell. I was actually hired in March of 1997, laid off a week later, and then hired back. As 1998 approached I read an article that predicted that Novell was going to be swallowed up in a merger or an acquisition and that Apple’s survival would be based on who they chose as their CEO. In short, one of these two companies wasn’t going to be around in 1999.
Well, Novell was eventually bought, but it would be more than 10 years later. Apple of course would go on to name Steve Jobs as their CEO and change our relationship with technology forever. Who knew? Nobody saw that coming in 1998.
With the passing of Steve Jobs I’ve consumed my fair share of professional and personal obituaries, commentaries and tributes. And as I sit here and type this out on my iMac I can’t help but admire his many accomplishments. As I’ve watched Novell struggle through the years and Apple succeed, it’s a testament to Steve Jobs’ genius. Steve once said, “Design is not just what it looks like. Design is how it works.” While Steve was the genius behind the design of remarkable products, he was also the genius behind the design of a remarkable company. According to reports, Apple was three months away from filing for bankruptcy when Jobs retook the helm. Today Apple is the world’s biggest company, has more cash than the U.S. government, and if I would have bought Apple stock in 1998 instead of my first Mac I would be $159,721 richer today. Bloomberg reported that Ross Perot’s council to the young Steve Jobs was that the only way investors would let him pursue cool things was by delivering consistent profits, and according to Bloomberg’s calculations Steve ran with that advice; Apple has beaten Wall Street’s expectations by 30 percent, on average, since 2006. Now contrast that with Jobs own words, “You can’t talk about profit, you have to talk about emotional experiences.” Interesting that Apple never released a gussied up annual report exploiting the achievements of the company, and yet their results were the envy of business. Well before the releases of the iPod, iPhone, and iPad Ram Charan wrote that Steve Jobs was someone with remarkable business acumen. This complement coming from a wise professor and business guru directed at Steve Jobs the college drop out.
As we read and learn more about Steve Jobs there’s a lesson to be learned when they highlight his business acumen, they’re not saying that Steve understood finance really well. Which is too often how we define business acumen. Steve understood business really well and finance is a big part of business, but so is marketing, so is creativity, so is organization, so is product development, and so is so much more. Steve understood the big picture, or rather all the components that have to come together to make a company successful. And not only did he understand these components, he understood how to orchestrate the components and the players to accomplish incredible amounts of incredibly important work. Case in point… I didn’t demand an iPhone in 2006, I thought my Motorola Razr was more than I would ever need, but in 2007 there I was standing in line to get my hands on an iPhone that a few months early I would have never imagined needing, now I can’t imagine living without it. It’s said that Steve never personally programed anything and that his whiteboard drawings were sometimes incomprehensible, and yet he’ll go down as one of the greatest innovators and business minds of our day.
“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.”
Steve Jobs, thanks for being crazy.
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