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15 CEO Mistakes

CEO’s, company presidents and business owners almost always make the right choices, right?


And sometimes the solutions are so remarkably obvious that someone who’s not even a part of the company could explain how to fix the problem. 

Take Mattel’s former management, for example: Mattel reportedly purchased The Learning Company for three billion dollars and ended up having to sell it a few years later for the price of zero, according to Bain and Company consultant and author, Chris Zook.

It’s difficult to imagine how anyone can make such a colossal blunder, let alone, the “highly skilled” business elite, who come with a pedigree.
Sure markets and economies fluctuate, disasters happen and even consumer’s tastes change, but sometimes the errors and mistakes made at the upper echelons of business boggle the mind.

Here are some basic mistakes CEO’s, Corporate Presidents and business owners can avoid…

1.    Undervaluing employees

The only thing more important than your employees is your customers and that’s even arguable.
The administrators of so far too many companies view their employees as nothing more than a commodity that provides the necessary service. People aren’t products. They aren’t machines. Employees are human-beings. They have opinions, needs and feelings. The quality of their work, their loyalty and customer service depend on those human qualities as much, if not more than, the simple digits on a paycheck.
What this means is that it’s extraordinarily important for companies to retain their best employees and keep them happy. There are many reasons for this.

Happy employees are likely to do better work.

Satisfied employees are more likely to be loyal.

Good employees are very difficult to replace and the cost to replace and train new employees is exorbitant.

Anytime an employee leaves they have valuable knowledge and information about your company, which could also be a danger to your business.

So how can you keep your employees happy? Offer good wages, whenever possible and if that’s not possible, then offer fair wages and try to supplement them with other perks, or benefits, whether that’s a handful of extra vacation days, a brand new coffee maker, or a better schedule.

Create a pleasant work environment. Give good benefits. Offer working hours that are enough to give employees the money the need to earn, but not so much that they become overworked and disenchanted. Eliminate your employee’s problems before they happen. Give good employee training and service.
Remove employees who set bad examples.

Now, you may complain that you don’t have enough money to offer fair wages, good benefits, or a high level of training. You may say that you don’t have enough money to hire enough people, so you can’t help but be short staffed and overwork your employees. Okay, but there are also other less costly ways to keep your employees happy.

Be a good boss. Be available, supportive and fair. Be the role-model for the type of behavior and work ethic you would like your employees to display. Try to be as equal as you can to your employees (try to avoid setting yourself apart in a way that shows you feel you are above them). Lead by example.

Offer praise and rewards (These don’t have to involve money. Sometimes verbal praise and positive recognition, especially in front of peers, can be just as pleasing as cash or merchandise) Remember birthdays. Try to offer some understanding and flexibility in schedules. Anticipate your employee’s needs and provide for them.

Creating a pleasant work environment can include little things like extra friendliness, enhanced safety, plants, energetic lighting, a high level of cleanliness, convenience: things that don’t cost a lot of cash.
Surprise employees with your company’s kindness and generosity (Give them a cake on their birthday. Reward them for a job well done with a box of doughnuts. These are small, inexpensive things, but they can make a huge difference to your employees).

Good employee training comes from utilizing people with a gift for training and proper planning. The early phase of a new hire’s career with your company, should be focused on training and giving that new hire all the necessary tools, to not only work at your company, but to excel. Too many companies train employees just enough to function and then throw them into the deep water, before they’re well prepared and confident. That’s not a good way to build employee loyalty, or to provide your clients with top notch service.

If you are forced to over-work your employees, try to make it up to them by improving their schedule or offering other rewards or, at the very least, high praise. Try to pay your employees based on their performance and contribution, rather than their tenure.
Remember, your customers don’t see you. They see your employees. If you want to make your product or service great, you need to make your employees great and if you want to have great employees, you need to have happy, loyal, motivated and well-trained employees.

2.    Undervaluing customers

Perhaps you’ve seen the show “Kitchen Nightmares,” in which, brilliant and frequently abrasive Chef Ramsey, sometimes interacts with owners of unsuccessful restaurants, which are going out of business. To the viewer’s amazement, a number of these restaurant owners do not seem to care about their customers. They fail to offer good products, fail to anticipate customer’s needs and ignore customer complaints. They simply do not seem to care if their customers are happy, or not. It’s absolutely astounding!

Sometimes, even intelligent people somehow stop caring about their customers. This is like trying to catch a rabbit by simply ignoring it. It’s never going to work. There may be some circumstances in which ignoring the object of your desire, for a time, is advisable, but business applications, which frequently involve customer service are generally not one of them.

Any Company’s #1 Goal should be pleasing the customer. Sure, there are the moral and ethical reasons for doing this and those are important, but if you want the bottom line in business, it’s this: repeat business is everything.

Brand loyalty is huge! Many companies make a living by selling many small products for a slim margin, which accumulates revenues. Such companies include grocery stores, gas stations and newsstands. They have an absolute need that these customers continue to give them repeat business on a regular basis.

Sure, some companies, an auto dealership perhaps, will say, “we sell our products for such a high margin that we don’t need repeat business.” This may seem true on a superficial level, but you would be ignoring the power of repeat business and word of mouth sales.

Maybe you sell one car for $30,000. That’s wonderful! But if the person likes your service and is impressed with your company, they may return in the future to buy two more cars for $70,000 and their heightened opinion of your business might result in word of mouth sales to three other people, totaling another $90,000. If these people are impressed with your company, the same thing could happen, as they refer several other new clients to your company and so on and so forth.  Repeat business and word of mouth sales snowballs from there.

So you see, whether you sell products for a measly five cents on the dollar, or turn a profit of $20,000 on every sale, pleasing customers is the #1 key to the success of any business.

Now, some of you might point out that you don’t need to please your customer if you’ve obtained a niche market, in which you’re the only provider for that product or service. This may be true, but if you’re not pleasing your customers, you’re setting yourself up for any other company who enters your niche market, to bounce you easily from contention. 

3.    Deserting the core business too soon

Some “visionary” leaders fall flat on their faces. Many of the best have even done it repeatedly, losing millions and occasionally, billions of dollars, then they dusted themselves off and returned to achieving bigger and better successes.

One tip to avoid falling flat on your face is, know your core business.

How does your business earn most of its revenue? What sets your business apart?  Why are people doing business with you, instead of another company?

Maybe you sell stereos and you’re doing well.

Someone asks you, “What’s your core business?” You say, “Selling stereos.”

Yes. That’s the obvious answer, but why are people buying their stereos from you, instead of from someone else?

Is it Location? Is your store on the corner and you have wonderful visibility? Maybe moving into a bigger storefront would be a huge mistake. 

Is it customer service? Do you have a really friendly staff, who are always eager to help your customers? Maybe you should think of ways to retain your employees and keep your real “core” intact.

Do you advertise better and more frequently and more effectively than your competition? Then maybe you shouldn’t cut your advertising budget.

Is it value? Maybe your customers love your reasonable prices. Perhaps you should think about selling a new product to boost your revenue, instead of increasing your prices, like you were planning on doing.

The point is that even a lot of business owners and CEO’s don’t know what really drives their company’s revenue. Whatever that is, you need to figure it out. You can’t protect something, if you don’t know what it is and you certainly can’t build on it effectively.

4.    Failing to adapt

Business is constantly changing. Economies fluctuate. Customers can be fickle and fashions, trends and preferences change constantly. All living things adapt to survive. There’s a good chance that you and your business will need to adapt as well.

Many businesses have not adapted, but you will not find them, because in many cases, they are no longer here.

Many CEO’s and business leaders see the value of adaptation. They say their company wants to adapt. They say their company is constantly finding new ways to adapt. But when you look at the changes going on within the company, there is actually little adaptation taking place and when one scratches their head and wonders why, we see that there are few, if any, systems in place to encourage improvement and adaptation.

The company line is usually something along the lines of, “We are an innovative company that constantly strives to adapt and improve within an ever changing market place,” but for most companies, they say this and then veer strongly in favor of digging in and trenching where they’ve had past success, because superficially, this seems safer and requires less effort and seemingly less risk.

Wanting to adapt and improve is one thing, but actually doing it is something else.

You need to evaluate your company honestly from the inside out and then, more importantly, from the outside in.

You need to set up systems to come up with the best ideas.

You need to spend copious amounts on planning and research.

You need to make detailed schedules and precise information about the changes you’re implementing for your staff.

You need to retrain your personnel and after you’ve finished implementing your changes; you need to look back on them to see if the changes are actually an improvement and to determine if more changes are still necessary.

5.    Reducing quality by raising revenue

Many many many very successful companies have fallen by the wayside, because of owners who cut back on quality to raise revenue.

A classic example is a very successful family owned restaurant with a client base, who love it. The food is wonderful, the service is great and everyone is happy! Next thing you know, the owner sells the restaurant to another person or company. This new ownership changes recipes to minimize expenditures and maximize income, but somehow they forgot that the food isn’t the same.

The most important thing in business, the clients, are no longer happy and soon a wonderful restaurant, which was very successful and very beloved, has been driven into the ground by an owner who didn’t understand that there are other tactics that can be used to raise revenue.

Cutting quality is almost never a good business tactic.

In the case of the new restaurant owner, who wanted to raise profits, he could’ve; promoted his restaurant better to boost sales, introduced popular new products with higher sales margins, used the restaurant’s brand to introduce new products or services, target a new clientele who are likely to spend more money there. The options for improving are nearly limitless.

Cutting back quality is almost always going to make your customers unhappy and unhappy customers frequently make themselves former customers.

6.    Failure to create an enjoyable work environment

So many CEO’s and business owners undervalue the importance of working in a nice environment. A pleasant work environment can make employees feel good and employees who are happy tend to work better, show more loyalty and be more reliable.

Your company can save a tremendous amount of money, simply on employee retention, diminished sick days and increased productivity.

Now you may say, “My company doesn’t have money to install a cafeteria, gym or swimming pool for our employees.”

Well, while those are all excellent ideas, most business can’t afford and really don’t need such extravagance.

Here are 50 ways you can improve your work environment…

1.    Open the windows to get fresh air and light
2.    Keep the temperature at a comfortable level, not too hot, or too cold
3.    Use color to brighten up the atmosphere
4.    Use art to create a more sophisticated, interesting and pleasurable work environment
5.    Bring in plants to add life to what’s often a stark and sterile environment
6.    Get a water cooler and keep it refilled
7.    Get a coffee machine and offer free coffee and tea to your employees
8.    Keep the bathrooms clean and sanitary
9.    Keep it safe, have systems in place to protect your employees from slippery floors, etc.
10.    Whether you use flowers, air fresheners, or fragranced cleaning detergents, make sure it smells nice
11.    Use praise to keep your employees happy
12.    Use paper certificates as rewards for good performance
13.    Celebrate employee birthdays with small gifts
14.    Organize holiday parties for your employees
15.    Consider a four-day work week and/or telecommuting
16.    Use recycling bins to help employees feel good about what they’re doing
17.    Give superior employee training
18.    Make sure supervisors are available to their subordinates
19.    Have systems in place to deal with employee complaints quickly, effectively and amicably
20.    Get rid of employees who poison the atmosphere
21.    Lead by example
22.    Consider dress-down days
23.    Consider playing light music in elevators and lobbies
24.    Organize incentive contests and competitions
25.    Anticipate employee needs
26.    Provide adequate parking
27.    Make employee schedules as convenient and desirable as possible
28.    Promote from within, whenever feasible
29.    Try to make salaries reflect employee productivity & contribution instead of tenure and longevity
30.    Celebrate employee tenure
31.    Celebrate employee production
32.    Make sure that your employees remain well informed about company issues
33.    Hold regular meetings to solve problems, implement improvements and disseminate information.
34.    Surprise employees with unexpected generosity. Bring doughnuts, or give them a day off as a reward.
35.    Recognize declines in morale and respond with aggressive morale building campaigns
36.    Incorporate fun teambuilding activities
37.    Offer excellent benefits whenever possible
38.    Keep your company clean and organized
39.    Keep your systems of work as simple, straight-forward and efficient as possible
40.    Praise before scolding
41.    Use more praise than criticism
42.    Put things in writing
43.    Offer employees a small number of computers where they can use Facebook, Skype, online games and other popular internet resources during breaks.
44.    Make your chairs comfortable
45.    Offer group discounts for chiropractors and nearby restaurants
46.    Consider team-building activities like leadership conferences, paint ball & white water rafting.
47.    Remember that if your employees improve their skills, they improve their value to your company. Consider providing free or subsidized additional training for languages, leadership, or specific skills related to your company’s business.
48.    Give your employees the things you want them to use, like daily planners, pens, notebooks, etc.
49.    If your employees need something to do their job, get it for them and don’t just get what they need, go beyond that.  If they need a copier machine to do their job effectively, don’t just get them a copier, get them a nice copier that’s not going to break every few weeks and derail productivity.
50.    Don’t forget employee families. Have a day where employees can bring their families to work. Plan events that include employee families and celebrate the birth of new babies, engagements, marriages, etc.

7.    Complacency

Your business is doing great. Okay. Now don’t fall asleep at the wheel!

Everything changes. Think of your own life. Things may be going great right now, but no matter how wonderful things are, eventually, you’re going to be in a shallow grave, as worm food. The idea is, everything changes. It’s unavoidable; so plan for rain when the sun is shining.

When the sea is calm and the sun is shining. It’s the time to chart your course, scrub the deck and check the hull integrity. You’re not going to want to do it during a storm.

Take a good look at your biggest successes, make a toast and/or throw a party and move on. Never be satisfied with success, or what you’ve created. Always look for new ways to improve and when you can’t think of any more; approach it from a new angle, ask others for ideas and walk away and come back to it again later. Look to re-evaluate and improve your improvements. There should be no end to positive change and adaptation. It should be an ongoing process for you and an ongoing process for your business.

If a shark remains still in the water, it will die. You must be a shark; always working, patrolling and searching for bigger and better things.

8.    Spreading one’s resources too thin

Some CEO’s and company presidents/owners are so single-minded in their desire to expand that they fail to see pitfalls. Often, instead of spending enough time, energy and resources on improving and maximizing their core business, they invest overly in new expansion opportunities and adjacency businesses.

Sometimes these businesses are not true adjacency businesses and may be ill-advised. Other times, the resources of the company may simply be spread too thin. Since the average U.S. business takes about three years to turn a profit and the majority fail anyway, starting a new business is always a high-risk/high-reward type of proposal.

It’s good advice to invest first in what you have. Improve it. Expand it. Maximize it. When that business is about as good as you can get it, start looking at other pastures.
9.    Immorality Karma

Many CEO’s and business owners cut corners. They do things they’re legally, morally or ethically not supposed to and they assume they won’t get caught.

Don’t do this. You don’t need it. There are so many other ways to solve problems and be successful. Do things the right way and then they won’t come back to haunt you. You don’t want to have to be looking over your shoulder all the time.

Few things are less enjoyable, than thinking everything is going wonderfully, when suddenly your business is lying in ruin at your feet, all because of a “little” corner you cut, or a little law you broke, years earlier.

Karma has a way of catching up to people. Don’t test it. The nasty secret that you think is safely in a buried box, has a surprising talent for being exhumed. It will surprise you.

Take this example: excerpted from The 101 Dumbest Moments in Business 2003 Edition: “In February 2003, eleven years after German inventor Harry Gaus discovered that Conair Corp. had been using a safety mechanism he invented to shut off hair dryers that fall into bathtubs, Gaus was awarded $46.1 million in a patent-infringement lawsuit.”

How did Gaus learn of Conair’s infringement? He says Conair told him. At a meeting to discuss a potential partnership, a VP for engineering disclosed that the company was already marketing a dryer that ‘may infringe on your patent.’ Oops.”
10.     Not knowing your own company

You’ve heard the phrase, “head in the clouds?” Is that you?

Do you know the details and intricacies of your company? Do you know how to do the different jobs there? Have you met all your employees? Have you visited all your locations? Are you personally familiar with your products? Do you use them? Have you met your customers and are you familiar with their wants and needs?

Many business leaders simply assume the position, take a couple handfuls of statistics and move right into the decision making process.

Perfection is in the details.

The best leaders have a panoramic view of their business from the inside out and the outside in. They can see things from their viewpoint, the customers’ viewpoint and their employees’ viewpoint and they take this 360 degree vantage point and try to use it to make the best decisions for everyone.

Don’t be clueless. Congratulations on reaching the pinnacle, but remember, there’s only one view from the top and you can’t see everything from there.

There’s a wonderful TV show called “Under Cover Boss,” in which bosses pose as employees to learn more about the training processes and inner workings of their companies. Be an under cover boss. Interact with your customers and your employees. Don’t be you. Be one of them. You’ll learn more about the truth that way and it will make you a better leader.

Let your subordinates train you and see how they teach and what they’re teaching? You’re almost guaranteed to discover some improvements that can be made.

Visit your store fronts as an undercover customer and see how the service is.

Use your products and it’s not advisable to just try them. Use your products on a regular basis for as long as they’re your products. This will give you ideas for improvements and if you’re frustrated and disappointed with the quality of your product or service, then think of how your customers must feel. It might be time to make some changes.

11.    Failing to be a leader by example

Here’s a leadership story. There was a company which was laying off employees. They already had a freeze on raises and no bonuses were being given. Some of the employees had worked there for years, without a wage increase. In the midst of this unfortunate situation, the CEO bought a brand new BMW using company money.

Now there are several problems with this. First, what type of message does it send to the employees about their worth, if you’re buying unnecessarily expensive cars, rather than retaining them or giving them the raises some of them desperately deserve?

Second, if the company is asking employees to be understanding about the company’s financial struggles and then the CEO goes out and buys a BMW on the company’s check, doesn’t it sort of feel as though the company is lying or misrepresenting the facts to employees? Either that or it gives the impression that the employees just aren’t very important to this company.

And finally, if a leader wants to lead by example and place his lot with his followers, what worse way to do that, than by setting themselves totally and utterly apart from their subordinates in a time of crisis. This CEO is clearly not on the same page as his employees.

Was the CEO justified in buying the BMW? Probably. Should he have used company money to buy it? Probably not.

Regardless of whose money he used, was this a good move for this leader? Absolutely not!
Most employees love a boss who can relate to them on their level. The majority of employees want someone who can be friendly and social, but still run the organization with order and efficiency; someone who walks softly, but carries a big stick.

Employees love to see a CEO, boss, or president, roll up their sleeves and get their hands dirty. Instead of sending the message, “I’m better than you and above doing the things you’re doing,” it sends the message, “It’s time to work. What you’re doing is valuable. I’m with you. I support you and I validate everything you’re doing and everything we ask you to do.”

If you want to be a great leader, lead by example. Be what you ask your employees to be and do what you ask your employees to do. You should not be above your own rules, just like politicians should never be above their own laws.

12.    Lacking Vision

The best leaders often have the best vision. This is frequently true, but the truth is that leadership requires many attributes and all of those attributes are rarely invested in one person.
 Sometimes great leaders take the worthwhile vision of another person and use their own skills to implement that vision.

Sometimes a great leader has a great vision and they must set it aside, because a great leader is often a good listener and a great judge of potential and they may assess that someone else has a vision with more merit than their own.

Your company desperately needs great vision. If that can come from your leadership and guidance, that’s wonderful and it’s a great gift, if not, find the vision. It doesn’t matter if you get that vision from an employee, friend, family member, book, movie or self-help CD, the important thing is that the vision is a great one!

And note that it’s not enough to have a vision, like an objective you can tell people. You need to have a crystal clear picture of this vision and then you need to draw out a roadmap of how to get there. Again, great leaders are often good at drawing out these maps, but if they’re not, there’s no shame in recruiting someone who is. A great leader knows how to delegate.

A great leader needs a vision and a plan. It doesn’t matter if it’s their own, it only matters that it is leading in the right direction. 

13.    Planning for the present instead of the future

Some companies keep their eyes on the prize and the prize is right there beside them every moment, like a carrot dangling in front of their face.

This is good and bad. The truth is, the prize is always there, but the real prize, the one with the most significance and value is always in the future.

You need to look at the future, examine it, question it and prognosticate it. You do this in order to adapt, in order to lead and in order to set your goals with the future in mind, more than the present.

Goals set only for the present will be in the past too soon. Keep your eyes on the horizon. In today’s ever changing and frequently adapting world of business, you cannot set your sites only on “the now.” You must keep an eye on your current situation and plan for the forever fluctuating future.

People have trouble walking when they’re looking at their own feet. The true goal is ahead of you.

14.    Failing to implement proper structures

Oversee all the phases. This doesn’t mean you have to have your hand in everyone’s cookie jar at all times, but it does mean that you need to review your business from the top to the bottom. Nothing goes unexamined.

Look at your HR and hiring practices. Are you getting the kind of employees you really want and need? What types of promises are you making them? Should more be offered? Should less? Are promises being kept by both sides?

Look especially at your employee training. How are they trained? Is the information still correct and up to date? What impression of the company are employees getting during training? Are employees learning everything you want them to know? Do they have all the information and training they need to succeed?

Look at the daily operations of your company. What processes can be streamlined? Where are your employees wasting time? Is your company wasting money on anything? Are your employees working diligently? Are people really working on the tasks they were assigned, or are some people doing other people’s work, or wearing more than one hat? Are you overstaffed, or understaffed? How is the work environment? Is your employee morale good? Are your best employees being rewarded? Are your weaker employees being properly retrained or dispatched?

Look at your business from the client’s perspective. Use the products or services your company offers. If your employees know you and you can’t do it in secret, then send a friend or relative to purchase the product, or utilize the service, so they can tell you how well your company is really doing. Does your product or service fulfill the promises of its advertising? Do you deserve repeat business? What’s your brand name on the market? What can you do to improve your product or service and increase brand recognition and customer loyalty?

Now look exclusively at employee and customer retention. Do you have high employee turnover? You need to find ways to keep your best employees. Do you have a mediocre rate of customer repeat business? You need to find ways to boost those numbers.

Now look at your revenue and expenses. Where else can you save money and where else can you make money? Are you paying a lot of money on heating and cooling, when you could just be opening and closing windows and shades? Can you boost your income by adding new products or service? Can you come up with a great advertising campaign or a wonderful customer incentive program?

Now look at the future. Plan for a variety of contingencies. Where’s your market headed? What are your competitors doing? What problems could arise in your future? Are there any irresistible adjacency moves you should be making? Are you sticking to your vision? Where is your company headed and what’s the best way to get there, now and in the future?

Now look at this examination. How can you do it better? How do you need to adapt? What systems can be more efficient? What protocols can be written out in more detail to make expectations clearer? How can these changes be planned and implemented more effectively?

15.    Not heeding the information

Information and statistics can tell you almost anything in plain terms. Almost anything can be measured and assessed logically and rationally with statistical data, whether you’re in a product driven industry, or whether its service oriented. You need to find ways to get detailed accurate data on everything your company does. The truth is almost always in the data.

Some leaders fail to seek out data. They accept that the statistics are not available, that the research is simply not there.

There are ways to get it; surveys, phone calls, walk through polls, internet questionnaires, etc., but some leaders just don’t realize that English is not the official language of business. The official language of business is statistical information.

If you really want to know your business and understand your market, if you really want to plan effectively, to budget accurately, to gauge progress, to assess profit and loss correctly, you must know the accurate numbers. They are the Holy Grail of your enterprise.

Comments sent

3 comment(s).
Glenda T. Johnson - 2/14/2019 12:16:04 PM
I am from the software background and I wanted to become a CEO to a company. I think working hard is only the key to get succeeded. At present I am working as a manager in rating services. The tips which you have mentioned about how you should be like are very useful for people like me. I think Patience is the main thing. Treating everyone equally and not underestimating people is very important.
amazing facts in hindi - 6/22/2018 8:54:30 AM
very good, its true
DEBEM BOXER 150 - 4/14/2018 2:43:52 AM
Successful CEOs always face the mistake of leaving their talented, well-off employees. Pity.
Thanks for your post, it is very true with the current practice!

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