Fast Strategy

Today's change is both fast and complex, where strategic planning is no longer fit because of the rapid changes and unpredictability. Traditional approach of companies, five to ten years ago responding to change by setting vision and strategy and then start following it, does not work anymore.

Thus, industries such as aerospace, healthcare,pharmaceutical, energy, retailing,advertising,financial services etc are engulfed by fast complex strategic change, need to be alert every day, week and month to review their strategy constantly i.e. need for strategic agility responses /flexibility.

Strategic agility is the ability to continuosly adjust and adapt strategic direction in core business, as a function of strategic ambitions and changing circumstances, not just new product or services, but also new business models and innovative ways to create value for company.

FAST STRATEGY key enabling capabilities:-

1. Strategic Sensitivity: both the sharpness of perception and the intensity of awareness and attention.

2. Resource Fluidity: the internal capability to reconfigure business systems and redeploy resources rapidly.

3. Collective Committment : the ability of the top team to make bold decisions - fast, without being bogged in "win-lose" politics.

Economies of scope ? or scale

First cousin to economies of scale is economies of scope, factor that make it cheaper to produce a range of products together than to produce each one of them on its own. Such economies can come from businesses sharing centralised functions, such as finance or marketing. Or they can come from interrelationships elsewhere in the business process, such as cross-selling one product alongside another, or using the outputs of one business as the inputs of another.

The idea of economies of scope has been the underpinning for other sorts of corporate behaviour including mass production and Merger & Acquisitions, but particularly diversification. The desire to garner economies of scope was the driving force behind the vast international conglomerates built up in the 1970s and 1980s, including BTR and Hanson in the UK and ITT in the United States. The logic behind these amalgamations lay mostly in the scope for the companies to leverage their financial skills across a diversified range of industries.

A number of conglomerates put together in the 1990s relied on cross-selling, thus reaping economies of scope by using the same people and systems to market many different products. The combination of Travelers Group and Citicorp in 1998, for instance, was based on the logic of selling the financial products of the one by using the sales teams of the other.

Low water mark

Today's focus on the credit crisis and rising prices for food and oil has temporarily put another global scarcity in the shade: water.The United Nations predicts that by 2025, two-thirds of world 6.7 billion population representing 60 countries will experience severe water shortage measured by litres per person per day (i.e. litres per capita/day) at 135 litres per capita/day, bare minimum for a country to prosper. At present, only Kuwait and the United Arab Emirates fall short of this low-water mark in terms of theit naturally available renewable water resources.

Cloud computing

Cloud computing is a rebranded form of "utility computing", becomes a utility means simply plug into. Companies could ditch some or all other servers/ IT fixed assets and tap into a virtual pool of computing resources via an interface as simple as a web browser. Standard IT capabilities - memory, storage,processing power and software can be purchased on demand, over the internet and billed according to usage.Basically, companies can tap into Amazon's or Google vast data centers and just buy processing power on operating expenses basis. The closest match to this platform is

"Google application" - https://www.google.com/a/

IR vs PR

Investor Relation(IR) is about fairly disseminating of company fundamentals, far more than it is about marketing or promoting a corporate image.

IR provides information and analysis so that investors will be able to develop a well rounded understanding of the company and its strategies, help to achieve a fair market valuation for its securities, create a body of investor support and a climate of favourable opinion.

The result is a loyal shareholder base which gives the company the ability to approach its capital management exercises with confidence. Ultimately, this will be reflected in the demand for the company’s shares and the price of those shares.

Essentially, IR is a component of capital management and an element of corporate strategy.

Strategy Focused Organisation

In today's business environment, strategy has never been more important. Yet research shows that most companies fail to execute strategy successfully. Behind this abysmal track record lies an undeniable fact: many companies continue to use management process- top down, financially driven, and tactical - that were designed to run yesterday's organisations. The key underlying success factors for a revolutionary breakthrough in corporate performance are aligning and focusing resources(i.e. executive teams,business units, human resources, information technology and financial resources) on strategy.

The five key principles for a strategy-focused organisation

1) Translate the strategy to operational terms
> strategy maps
> Balanced Scorecards

2) Align the oganisation to the strategy
> corporate role
> business units synergies
> shared services synergies

3) Make strategy everyone's everyday job
> strategic awareness
> personal scorecards
> balanced paychecks

4) Make strategy a continual process
> link budgets and strategies
> analytics and information systems
> strategic learning

5) Mobilize change through executive leadership
> mobilization
> governance process
> strategic management systems

Snakes in Suit

Snakes in Suits: When Psychopaths Go to Work

Is Your Boss a Psychopaths ?

Psychopaths have a profound lack of empathy. They use other people callously and remorselessly for their own ends. They seduce victims with a hypnotic charm that masks their true nature as pathological liars, master con artists, and heartless manipulators. Easily bored, they crave constant stimulation, so they seek thrills from real-life "games" they can win -- and take pleasure from their power over other people.

by psychopathy expert Dr Robert D. Hare, Ph.D

21st century career skills sets

Jobs are changing due to shift in Organization and Management.

Field of Dreams

Noble Group - commodities trader and supply chain provider

Milestones

1987 Founded by Richard Elman
1994 Listed in Hong Kong
1996 Privatized
1997 Relisted in Singapore
1998 Cocoa & Refined Oil started
2000 Sugar started
2001 Started Noble Trade Finance and Noble Investments
2002 Coffee started
2003 Expansion into Ethanol ; Market cap US$1 billion
2004 Started petrochemicals
2005 Started carbon credits ; Listed on FTSE - Hang Seng Index
2006 Annual turnover US$13.7 billion from US$80million in 1987

source : www.thisisnoble.com

Asian casino

Marina Bay Sands, Singapore

Investment: SGD6.5billion
Launch date: 4Q2009
Gaming area: 172,200 sqf
Gaming machines: 2,500
Retail area: 1.0m sqf
MICE area: 1.2m sqf
Hotel rooms: 2,600
Estimated job creation: 30,000


Resort World at Sentosa, Singapore

Investment: SGD6.0billion
Launch date: 1Q2010
Gaming area: 161,458 sqf
Gaming machines: 2,000
Retail area: n.a.
MICE area: 0.6m sqf
Hotel rooms: 1,800
Estimated job creation: 45,000

21st century Social Networking

Professional social networks - websites LinkedIN ( http://www.linkedin.com/) and Xing ( http://www.xing.com/) that help with business networking & job hunting. In contrast with mass market social networking such as Facebook and MySpace. Most users of social networks i.e. Facebook and MySpace have a lot of disposal time but not much of disposal income. With professionals subcribing to LinkedIN and Xing, it is the other way round.

Rising Risk ?

"People have been insuring risk which they can not insure !".

As US Congress wrestles with another bailout bill to try to contain the financial contagion, there's a potential killer bug out there whose next movement can't be predicted: the Credit Default Swap (CDS). In just over a decade these privately traded derivatives contracts have ballooned from nothing into a $54.6 trillion market. CDS are the fastest-growing major type of financial derivatives.

More important, CDS had played a critical role in the unfolding financial crisis.

First, by ostensibly providing "insurance" on risky mortgage bonds, they encouraged and enabled reckless behavior during the housing bubble.

Second, terror at the potential for a financial Ebola virus radiating out from a failing institution and infecting dozens or hundreds of other companies - all linked to one another by CDS and other instruments - was a major reason that regulators stepped in to bail out Bear Stearns and buy out AIG, whose calamitous descent itself was triggered by losses on its CDS contracts .

5 Misconceptions about China

Some of the most common misconceptions about China:-

1. Chinese culture is collectivist.
2. China has a centralized government.
3. China is a young nation.
4. The stock market in China is decoupled from the American stock market.
5. China is the world's biggest exporter.

Rationale/ conclusions :-

1. Chinese culture is collectivist
Different parts of China are trying different things to find the best formula. China does not have a grand plan for developing itself. It's very conscious that it's running the society as a series of experiments.

2. China has a centralized government
The process of evolution is experimentation. There is a lot of decentralisation in the process.The way this is moving forward is really a bottom-up process in which different localities will be doing different things.

3. China is a young nation.
China's economic emergence is unprecedented over the years in size, speed and scope and the South Korean "chaebol" model comes closest among the four to the type of capitalism ( i.e. US, Germany, Japan and South Korea) that may emerge in China. South Korean chaebol model would be dominated by large conglomerates that are not effectively family-owned anymore, but definitely family-controlled.

4.The stock market in China is decoupled from the American stock market.
Importantly, the difference in size makes China much more difficult to manage. China isn't sealed off from the rest of the world. Business in China is part of a complex global trading system that provides more different opportunities to progress.

5.China is the world's biggest exporter.
It will change extremely slowly particularly moving up in the value chain . The facts of the dependence on external innovation are very clear. In high-tech industries, 80 per cent of China's exports are from foreign companies including US. For high technology, China depends upon inputs and knowledge.

Disco tune saves lives

Bee Gees 1977 disco tune "Stayin' Alive" provides an ideal beat to follow while performing chest compressions as part of CPR on a heart attack victim. Basically, chest compressions to be given at a rate of 100 per minute in cardiopulmonary resuscitation (CPR). "Stayin' Alive" almost perfectly matches that , with 103 beats per minute rhythm.

Deception Perception

From financial statement shenanigans to fraudulent billing schemes, corporate frauds can be elusive. According to the Association of Certified Fraud Examiners of 959 recent fraud cases in US, fraudster usually operate alone, rarely have a criminal record, are nearly as likely to be female as male.

Fraud Statistics

USD$250,000 median loss associated with male fraudsters
USD$142,000 median loss at public companies
USD$110,000 median loss associated with female fraudsters
USD$78,000 median loss associated with frauds at private companies


46% fraud detected by tips
41% frauds committed by employees earning less than USD $50,000
29% committed by accounting staff
20% found by accident
9% discovered by external auditors
2% committed by IT staff

Source : www.acfe.com

The boy who saved Goldman Sach

IN 1940, a stockbroker from the Midwest took his ten-year-old son on a trip to New York City. They dropped in at the office of Sidney Weinberg, who was trying to restore the reputation of Goldman Sachs, the investment bank that had been disgraced during the great crash of 1929. Weinberg took the time to chat to the precocious youngster, even asking the name of his favourite stock. That may have been the most productive half-hour of Weinberg’s life.


Sixty-eight years later Sept 25, 2008, Goldman Sachs turned to that lad, now one of the richest men in the world, for a capital injection of $5 billion. The infusion of Warren Buffett’s money, and the backing of his reputation, means that Goldman has so far escaped the fate of Bear Stearns and Lehman Brothers during the recent credit crunch.

Mel Gibson Go Green

Actor Mel Gibson is one of the shareholder of the Green Rubber Global project (Sept 2007) - the world first commercially viable waste - free way to recycle discard tyres. This innovative way to recycle rubber and can turn mountain of unused old rubber into something useful. With this green revolution technology, help to recycle, saves money and help humanity at the same time.

Other celebrity owners include actor Bruce Willis, Bollywood movie producer Shekhar Kapur, former cricketer Kapil Dev and former golfer Lee Westwood. Green Rubber Global reported to be valued over £130 milion.

Alternative to Downsizing

Downsizing interferes with the network of informal relationships which innovators use to gain support for new product development. Innovative activities no longer connect with the rest of the firm. 3M has an alternative to downsizing that is reallocation. If jobs have to go, it does not mean that employees have to go as well. 3M’s policy, for example, is to find similar jobs for excess workers in other divisions. During the 1990s it reassigned 3,500 workers in this way rather than make them redundant. It is able to do this because it is constantly creating new products and new divisions to which these people can be relocated.

BRIC economies

GLOBALISATION used to mean, by and large, that business expanded from developed to emerging economies.Now it flows in both directions, and increasingly also from one developing economy to another. Business these days is all about “competing with everyone from everywhere for everything. One sign of the times is the growing number of companies from emerging markets that appear in the Fortune 500 rankings of the world’s biggest firms. It now stands at 62, mostly from the so-called BRIC economies of Brazil, Russia, India and China, up from 31 in 2003 (see chart 1), and is set to rise rapidly.

There has been a sharp increase in the number of emerging-market companies acquiring established rich-world businesses and brands (see chart 2), starkly demonstrating that “globalisation” is no longer just another word for “Americanisation”. Within the past year, Budweiser, America’s favourite beer, has been bought by a Belgian-Brazilian conglomerate.

The sheer size of the consumer markets now opening up in emerging economies, especially in India and China, and their rapid growth rates, will shift the balance of business activity far more than the earlier rise of less populous economies such as Japan and South Korea and their handful of “new champions” that seemed to threaten the old order at the time.

Blame the "financial" engineers

Civil engineers build real structure but financial engineers build dreams ( in actual fact disaster )


Key to downfall of US financial markets architecture by these financial engineers

1) OTC - Over the Counter Market means the trade are done off the exchange.

2) CDO - Collaterised Debt Obligations , namely derivatives of debt that are backed by mortgages.

3) CDS - Credit default Swaps, which are effectively guarantees of risks of default on debt. A seller of CDS pays out like an insurance policy in the event of the debt defaults.

4) Mark to Market - The value of securities held are priced at what the market price is, not at cost. However, if price are at firesale levels, banks may go bankcrupt.

US$ 80bil asset - Indonesian

Many wealthy Indonesians, especially ethnic Chinese, have increased the placement of their financial assets in Singapore especially since the Asian financial crisis and political turmoil in 1998. There were an estimated 23,000 high net worth individuals in Indonesia, with total assets of US$80 billion. The number of high net worth individuals grew from 17,000 two years ago(1996) , after a boom in commodity and energy prices and in the local stock market. Many wealthy Indonesians also have homes in Singapore and some have listed their companies there.

Three key factors for rich Indonesians in placing their money offshore :-

1) product diversification - flexibility in investing their money in a wide array of portfolios

2) security - prefer to have geographical diversification in order to avoids polictical and security risks

3) tax incentives - Singapore doesn’t have witholding tax on interest so it’s the key thing.

We are all pirates ..

Reality check - Humans are copying machines. We learn by imitating one another, That's how we learn to speak. That's how we learn social norms. That's how culture happens. Everything we do is an invitation to copy. And now, thanks to digitization and the Internet, we can express that in ways that we could'nt before. The internet is the ultimate copying machine (i.e. illegally downloading copyrighted music and remixing music to make new songs ) and it's affecting many business especially media and entertainment.

DVD pirates - Look at DVD pirates on Main Steet. They release films on DVD for US$5 just as Hollywod releases the fim in theaters.

Fashion pirates - Copy the 3-D design of garments, they can create trends. Trends can be disseminated so quickly and the new rapidly becomes old, we have season in fashions.

Music pirates - Most music remixes falls on the wrong side of copyright laws because they involve pirated samples, music clips and trade marks that are mashed up and reused.

Software pirates - iPhone firmware code was hecked and circumvented in order to be sold to black market resulting million dollar losses of revenue to Apple.

Piracy has ingrained into our culture and economy because of impact of remix culture and the open source movement. They are based on sharing and ultimately they are more powerful than most intellectual property law because they operate in the public domian, which is idefinable and mutable.

10 billion photos

facebook hosted 10 billion photos. Imagine the photos are line up side by side, the line will be hallf way to the moon. facebook is not just photo-sharing tool per se but it take a heck load of photos. http://www.facebook.com/

Fighting for Talents

Talents sought after - technical finance skills and commercial acumen.


Andy Li, promoted to Vice president recently of US$3.7-billion-in-sales China Agri-Industries Holdings

Andy Li, the 35-year-old head of finance for Hong Kong-based China Agri-Industries, is a perfect front man for Ethanol - renewable energy multi billion dollar business . He has taken a top job at one of the handful of state-owned companies selected to create a new industry for China. At the center of the country’s increasingly urgent push to develop sources of renewable fuel, China Agri was recently spun off from Cofco, China’s largest oils and food importer and exporter. China Agri is a food processor that has set its sights on the biofuels business, a change that involves a lot more than introducing new equipment to produce ethanol.

Since joining the company in October 2006 , Li has executed a previously developed plan to list China Agri in Hong Kong, a job he completed in March 2007 . Now he must knit together the disparate financial management and reporting systems of more than 30 subsidiaries, nurture what he calls a “capital-markets-driven” culture of transparency and corporate governance, and manage outsized investor expectations (at one point in April, China Agri’s stock price was worth 85% more than its listing price).

He is also installing a standardized ERP and database system, and is helping find a service provider to monitor and analyze the company’s operating risks. Above all, Li is a key player in China Agri’s grand plan to spearhead the mainland’s ethanol revolution, which requires financial savvy to fund refinery construction, mergers and acquisitions, research and development, and other costly initiatives. It’s worlds away from Li’s previous jobs with Hong Kong blue chips Hutchison Whampoa and Esprit Holdings. But then that’s the point. A certified public accountant and chartered financial analyst from Hong Kong, Li is transferring skills learned at venerable, established Hong Kong-based Asian multinationals and importing them into a Chinese state-owned environment desperately in need of the know-how.

In this, Li is part of a growing band of young, Western-educated Hong Kong professionals attracted by the possibilities of reinvigorating Chinese enterprises, an adventurous fraternity that currently includes Daniel Lai and Eric Leung, the CFOs respectively of Tianjin Port Development Holdings and China Gas. Typically brought in to reassure foreign investors as the mainland company seeks a listing, professionals such as Li see their role stretching beyond reporting and control to include strategy and capital markets transactions. It remains to be seen whether their enthusiasm and expertise can win over old-line subordinates, transform sclerotic financial systems, and give them a say over strategic decisions.

Jennifer Li, 40 year old CFO of Baidu, China’s top Internet search provider.

Jennifer Li previously was the North America controller of GMAC, the financing arm of General Motors. Jennifer Li has spent her whole career with GM, working in treasury in New York and Singapore before serving as CFO of GM China and later of GMAC’s North American operations.

Currently, she joins a young and vibrant company Baidu, but one with its own set of challenges. Among them: sustaining Baidu’s blistering rate of growth (second quarter, 2008 revenues were up 100 percent compared with the previous year) and managing some controversial aspects of the company’s business, including a successful MP3 search function that provides links to copyrighted music.

Youre being watched

Electronic snooping by federal goverment may safeguard liberty - and also threaten it. If the authorities can and do collect such bits of data, piecing them together offers the tantalising prospect of foiling terrorist conspiracies. It also raises the spectre of criminalising or constraining innocent people's eccentric but legal behaviour.

The staggering, and fast growing, information-crunching capabilities of data mining technology broaden the definition of what is considered suspicious.


Facts.

>FAST, a Norwegian company bought by Microsoft in 2008 for USD1.3billion, collects data from more than 300 sources( including the web) for national data mining programmes in a dozen of countries in Asia, Europe and North America.

>Swedish Parliament in June 2008, voted in law a data mining programmes strongly backed by defence ministry, will provide sweeping powers to monitor international electronic messages and telephone traffic.

> Companies, and especially credit- reporting firms, generally enjoy more latitude than goverment bodies do in making personal information available to third parties. They find "intelligence agencies *" are eager clients. Note*: Intelligence agencies in US, Canada, China, Germany, Israel, Singapore and Taiwan.

> Narayanan Kulathuramaiyer, an expert in data mining at UNIMAS, a Malaysian university, says companies are selling database access to intelligence and law enforcement agencies " at a level you would not even imagine".

Faster,heavier and larger

Indian Railway key numbers

1853 first passenger service
63,000 km long network
7,000 stations
1.34 milion workers
17 milion daily passengers
USD19.2 billion revenue 2008
USD 6 billion cash surplus from bankruptcy in 2003

There is no great mystery behind the strategy of this turnaround. It is common knowledge that the marginal cost in a capital-intensive business like Indian Railways is substantially less than the average cost of operations. It is for this reason that it followed a strategy of playing on volumes, driving down unit cost, reducing tariffs and increasing market share to achieve record profits. The focus is on increasing yield-per-train rather than increasing tariff-per-passenger or per tonne. To sum it up, we are faster, heavier and larger. Each word is worth US$2 billion so far.

Chief strategist - No Havard graduate dressed in a traditional white Indian kurta, the silver-haired legendary Lalu Prasad, current India's railways minister.

Lesson learn ?

Investment Bank debacle : Morgan Stanley, Goldman Sachs , Lehman Brothers etc ..

An analogy similiar to Utility (Conventional Banks) vs Casino ( Dealer / Broker - "WallStreet casino culture" )

Remedy : Two routes

Route 1 > separate utility from casino narrow banking prevents company relying on assets of unsophisticated customers as collateral of their highly sophisticated trading.

Route 2 > regulates casino sufficiently to ensure the failure so that they can not jeopardised the utility.

Global financial crisis sums up

In a nut shell , " it is the continuation of a corrupt system where profits are privatised and losses are socialized " Nouriel Roubini

Life finds it's identity

Life takes on meaning when you become motivated, set goals and charge after them in an unstoppable manner.

Passion .
Patience .
Preserverance

Meet the Scholars

Eureka! - I have found it! Archimedes

The most exciting phrase to hear in science, the one that heralds new discoveries, is not 'Eureka!' but 'That's funny...' Isaac Asimov

Work grows out of other work, and there are very few eureka moments. Anish Kapoor

People think of these eureka moments and my feeling is that they tend to be little things, a little realisation and then a little realisation built on that. Roger Penrose