The Great American Bail-out!

" In our nation's history, there have been moments that require us to come together across party lines to address major challenges.This is such a moment"

George W. Bush
US President


The 'moment' that Bush is referring to is the US$600 billion that Uncle Sam has commit ed to in its efforts to bail out some of the most illustrious names in American (world) finance.

As far as I can see, the US government has nationalised Freddie Mac, Fannie May and AIG. I guess 'bail-out' is a more politically palatable term than 'nationalization'. Lehman Brothers have been wiped out and there is more to come....not necessarily in America but also in other parts of the world. In a way, I am glad this has happened as even in bad cases like this, the sooner the better. It is good for all of us when our policy makers are forced to witness market forces debunking their propagandist economic projections and analysis. Remember the 'de-coupling' theory swirling around the last couple of years in major conferences and business publications? Well, if that's true, why are we so worried about the American economy? Aren't we supposed to be well on our way to become independent of American economic hegemony? There were some in the so called 'think-tanks' who would have us believe that the new holy grail of economic prosperity is India and China. These two countries are economic giants but as the way things stand now, all economic roads do lead to Washington not to New Delhi or Beijing. India and China are economically self sufficient countries whose domestic consumption can fuel their major industries. Not us. We still need the world and this world catches cold when the USA sneezes.

The troubles of American economy will illustrate the fact that as in greatness so will the effects of American 'power' be felt in its decline. If it is a decline.

The prudent step forward for us is to re-visit our economic fundamentals and have a vision for the next 50 years vis a vis India, China and as I have said many times before, Africa too. We need to stop deluding our selves that we can be free of American economic influence. America is not in decline....yet. Its fundamentals are just too strong for that to happen any time soon.

So, the message that we need to send to our decision makers is : Cut the crap. get down to work and give us the hard facts. I would rather work with a truthful bad news than a false good news. And, as Tan Sri Jawhar of ISIS has commented recently,it's time for the everybody to become part of the solution.

On another note : The latest annual report by Interbrand, Coca Cola is the most valuable brand for the eighth year. Financial players like Citigroup and Morgan Stanley have dropped places while Honda has improved.

Well, life should be just fine when Coke is still around!

Anwar Ibrahim : Lessons for Change Agents (?)

What do you do when you have to bring a tremendous change into your organization and the odds are heavily stacked against you?

You do the Anwar thing!

First you say something so grand that nobody takes you seriously. You repeat it now and then to keep it hot. Of course it will become the butt of jokes and there will smirks when you pass by the office water cooler. In fact, your old office sex scandal will be rekindled to cast doubts on your grand plans.

While the rest are doubting your ability to bring about that grand change of yours, don't loose heart. Work silently behind the scenes to influence key stake holders. Remember, in any organization these are not necessarily from the top ranks alone, they can also be from the lower ranks. Talk to them, cajole them and gain their confidence. Sometimes there are enough silent dissatisfaction with the goings on in your organization that you can have enough ears to listen to your change proposal. Getting them to listen to you is a fantastic start because you know that if only they listen, you can convert them to your cause.

Next, you wait for a opportune moment to blast into your organization’s radar. This may be in the form a company strategic retreat or town-hall (in the case of Anwar, it was the general election). Once again state your grand change plan. There will still be those who doubt you but you also have a band of change coverts now. Your doubters may even taunt you with words like ‘Lucy’, ‘Back seat’ and ‘doggy’ which are all somehow related to your alleged office sex scandal. Don’t despair as with more heads nodding to your favour, an amazing transformation will take place! Your idea will not sound so preposterous anymore! ‘Lucy’ will slowly fade into the background where she deservedly belongs.

Now, you are ready to move to the next stage : A personal victory to reinforce the fact that you can make the change happen. Anwar did that with Permatang Pauh. You have to find your own Permatang Pauh. It can be a 20 minutes meeting with your group CEO or your Tan Sri Chairman. Make sure that as many people hear about your little ‘success’ even if the CEO just said that he appreciates your pro-activeness and nothing else. But be smart; tell your CEO that you would like to speak to him again during his next visit for a more refined presentation. Plead with him to give you a chance. All the better if your wife used to work for him as his PA. Remind him what a good job she has done for him. Only a dumb CEO will not make the connection between a good PA-wife and a would be change agent-husband.

With this little but hugely meaningful victory, you state your change plan with more boldness. You increase your confidence meter a little more. The only difference is, this time you say to all and sundry your change plan’s time frame. Nothing gives purpose more life than dates and numbers. State it as if it is already happening. Let your doubters loose sleep over these dates and numbers.

Now, this is when your distracters will decide that they have had enough of you. They will try to derail you by ensuring that the CEO’s next trip coincides with your planned trip to Taiwan for a conference on new agriculture technology although your company is the motor lubricant industry. Anyway, you know best why you need to go there.

But you are too smart for that childish trick because you have already developed enough change agents who will be able to present the more refined change plan to the CEO with as much passion and conviction as you can. So, off you go happily to Taiwan.

Once you are back from Taiwan...

NOTE : As the Anwar saga has not ended, his continuing lessons to us will have to be put on hold while the story unfolds. Will keep you updated.

IBM CEO STUDY 2008 : Enterprise of the Future!

IBM’s 2008 CEO Study revealed some surprising and not so surprising insights into the goings on in the minds of CEOs. Its quite an impressive study : 40 countries, 32 different industries with 19% of the companies with more than 50,000 employees and 22% with less than 1000 employees. It involved 1130 CEOs and public sector leaders. It is a study with sufficient breadth and width.

The not so surprising finding is that the CEOs are all in unison in voicing the need for their organization to successfully undergo effective change. The surprising finding though is that 75% of the CEOs admitted that their organizations’ approach to change is on a ad hoc basis! There is more, 8 out of 10 CEOs said that they are expecting their organization to undergo substantial change in the next 3 years. Two-thirds are implementing extensive innovations to their business models. More than half of the CEO sample said they plan to drastically change their organizations’ capabilities, knowledge and assets with 71% planning to collaborate with others to get some of their operational work done (read outsource).

The CEOs have also identified 3 factors that they deem will provide the greatest impact to their bottom-line : Market factors (48%), people skills (48%) and technology (35%).

Finally (these are only some of the findings, there are more actually) 66% of the CEOs plan to use M&A as their expansion and global integration strategies.

The study have also identified the kind of enterprises that can survive the future. These enterprises with the following characteristics:

1. They are hungry for change
2. They are innovative beyond customer imagination
3. They are globally integrated
4. They are disruptive in nature
5. They are more than just generous; they are genuine.


Basically, the successful enterprises of the future will those which are continuously changing and looking for opportunities to change the way they do business and the products and services they offer. These continuous change is also reflected in the way they interact with customers and how they keep delighting customers with innovative services and customer experiences.

The successful enterprise of the future will also be globally integrated because more and more of them will have a global footprint. This global footprint will not stop them from being nimble in changing and adapting to local and regional needs. In fact they will disrupt their competitor and their industry by continuously changing the way the game is played.

The successful enterprise of the future will do all the above while maintaining a sense and purpose of genuine ownership of the environment in which they function in and the people whom they serve and also for those who work for them.

And, Guess what? This IBM study also set out to understand the differences in response between those CEOs whose organizations are out performing their rivals financially and those who are under performing financially. The verdict : The former is braver, more nimble, more change welcoming and more daring in changing the status quo!

In summary, the major findings of the study can be listed as below ( I am taking the following verbatim from the report) :

1. Organizations are bombarded by change, and many are struggling
to keep up.

2. CEO s view more demanding customers not as a threat, but as an
opportunity to differentiate.

3. Nearly all CEO s are adapting their business models — two-thirds are
implementing extensive innovations.

4. CEO s are moving aggressively toward global business designs,
deeply changing capabilities and partnering more extensively.

5. Financial out performers are making bolder plays.


NOTE : Some quotable quotes from the study :
1. The consumer’s concept of quality will no longer be measured by only the physical attributes of a product — it will extend to the process of how the product is made, including product safety, environmental compliance and social responsibility compliance.”
Victor Fung, Chairman, Li & Fung

2. “ Simply put, we want significant share in markets growing faster than others, which for us is more than
25 percent.”
Ron Logue, Chairman and CEO, State Street

3. “ We have seen more change in the last ten years than in the previous 90.”
Ad J. Scheepbouwer, CEO,KPN Telecom

4. “The key to successful transformation is changing our mind-set. For large companies, it is easy to be
complacent — we have to change this. Our company culture must have a built-in change mechanism.”
Masao Yamazaki, President and CEO, West Japan Railway Company

5. “ In a growing market, strong product functionality is most important to customers. However, in a mature market, we must also appeal to customers’ feelings and emotions. It’s critical to find the ideal balance of both.”
Motoki Ozaki, President and CEO, Kao Corporation

6. “ We must redefine our value proposition to customers.
Information and advisory content are becoming even more valuable than traditional drivers.”
H. Edward Hanway, Chairman
and CEO, CIGNA Corporation

Global Leadership

Was Henry The Navigator a global leader? The great Khans of Mongolia and the Vikings? I suppose its difficult to view them as such. It is much easier to provide modern examples of who is a global leader and what makes global leadership. Today, we use corporate chieftains as examples of global leaders. Carlos Ghosn, Welch, Immelt, Bill Gates, Tata, Carlos Slim and a long list of others are viewed as global leaders. From the political elite, some names stand out more than others: Mandela is one of them.

Global leadership is not a 21st century phenomenon. Ever since man realized that the land he is hunting on is much bigger and wider than what his limited senses actually allowed him to experience, he has been dreaming (and scheming) to impact that wider world of his. Man has always thought and acted in ways that were clearly intended to impact the vast horizons beyond his grasp. Some of them tried to impact by physical means while others through their intellect; both religious and secular. So, global leadership has been around for a long, long time. Or at least, some form of it.

The difference today is in its ferocity and magnitude.

The action of one man or woman in one city may have a reverberating effect globally in a matter of minutes. A single spark of idea can open up an entire industry (or put another out of business). The borderless nature of modern day living has made global leadership quality stand out even more both in the private and public sectors. The value of today's C-suite leaders are not measured on merely how much profit they are bringing into the company today but more importantly, how much they can continue to bring in the years to come. The contribution of a city Mayor is expected to last much longer than his tenure. The legacy of a national leader is expected to take the country into a future that he or she may not even be around to witness.

To do these, that leader must have global leadership qualities. Of course, the fundamental leadership qualities such as communication skills, the ability to paint a compelling picture of where the organization is heading and the ability to energize others must be there. Over and above these, I think today's leaders need to have the following skills to become effective global leaders:

1. Able to develop local solutions from a global perspective
2. Able to develop a global connection from local conditions
3. Able to create a win-win space far beyond their control. That's why, I find it hard to put the names of George Bush, Putin, Mitterrand, Churchill next to the likes of Mandela, Gandhi and the Dalai lama as global leaders because the former are those who impacted the world only for the benefit of their country (space). Their thinking was directed to the sole purpose of self benefit (although at many times these were confused with utilitarian motives). In that sense, a global leader is one who thinks of a win-win approach for not only his stakeholders but also of others.
4. Able to have a mindset that is inclusive and exhibit this through their daily actions.
5. Able to synergize cultural differences into unique strengths. Google is doing this in a great way in India because the people currently heading Google India are those who have been exposed to global leadership responsibilities and experiences.

As we progress into the 21st Century, what makes a global leader and what qualities make global leadership will become clearer but it will not become less challenging nevertheless. Managing and leading is up for the next phase of revolutionary development. We may have to forgo some of our previously held notions of what makes good management and leadership.

Or do we?

Rabindranath Tagore : Lessons for Malaysia

I came across these beautiful words by Tagore. It was incorporated by the Petra Group in its advertisement for the Sekhar Foundation which was established in remembrance of the doyen of natural rubber and palm oil research - the late Tan Sri Dr. B. Sekhar. It moved me enough that I had a quick shower and walked down to my mamak cafe to post this.....I was actually planning for a little TV and chat with my girl-friend as tomorrow I will be down in Singapore. Well, the chat can wait. I need to put my thoughts down.

Here is the poem :


" When the mind is without fear and the head is held high
Where knowledge is free
Where the world has not been broken up into fragments
By narrow domestic walls
Where words come out from the depths of truth
Where tireless striving strectches its arms towards perfection
Where the clear stream of reason has not lost its way
into the dreary desert sand of dead habit
Where the mind is led forward by thee
into ever-widening thought and action
into that heaven of freedom, my Father, let my country awake".

- Rabindranath Tagore -

Tagore, of course was offering this prayer for his beloved land of India. But, I suspect any one of us can utter the same prayer for our beloved Malaysia as we so desperately need to get "into ever widening thought and action". We are bombarded with a daily dosage of narrow and parochial thinking and arguments. Reason has been sacrificed for the sheer lust for power. Moderation has taken a back seat to unbridled words of hate. History is being prostituted to serve the needs of the corrupter. The roots that bind us have become the thorns that are bleeding our very souls.

While the nation's polity is sinking deeper into the quagmire of senseless hate speech and counter speech; the state of our economy is at the risk spiraling into the abyss of no return. In the same newspaper (NST) that I read the above poem, I also read Datuk Johan Jaafar's column. I love his writings but I found it difficult to agree with him with his latest piece. The political aspects aside, he wrote that we have to remember the formula that have made us great and that on many aspects we are as good or even better than the west. Well, this is typical of Datuk's generation. Datuk, let me tell you that the west is no longer the bench mark. We also do not believe the Mahathir era's illusion of grandiose. We know that we are being beaten to the finishing line in almost all spheres of educational,technological and economic endeavors. And we are not talking about the west beating us to it, we are talking about China, India, Brazil, Vietnam, Ireland and Mexico (the last 2 was never part of the so called developed west before, but they are pulling no punches now).

The formula that the good Datuk is talking about is the very fomula that has 'educated and moulded' us "...into the dreary desert sand of dead habit". We are singing the same old tune. We are dancing to the same old song. The world, it seems to me, is singing a different song. One that we are tune deaf to.

The entire Malaysian economic thinking is based on the same old tired formula : We make, people will buy". The problem is, others are making what we are making and they are doing one hell of a better job than us. So, where does that leave us? Lets produce more of the same. Or maybe, we should produce 'bio-technology' stuff. Lets set up a bio-engineering hub. For good measure, lets throw in a space technology hub since we had a Malaysian in space. Oh yes, lets also build on our head start in outsourcing (but sorry, we need to scrap English from the education system. Maybe our outsourcing clients will understand our narrow nationalistic needs and switch to Bahasa Malaysia instead!). So here we are with a master plan for various hubs.

WHERE IS OUR NICHE? WHAT IS OUR COMPETITIVE ADVANTAGE?

Somebody, anybody....please knock some sense into our politicians before we end up sending students to Vietnam to learn computer technology!


Note : Since my last entry on how Indian and Chinese companies are buying into what used to be their competitors, Tata Power is buying into an Australian power producing entity.

Orbis Unum!

Orbis Unum- Latin for 'one world'.

The age of globalization has given birth to orbis unum. Consider this : In 2ooo, Sony's market capitalization was four times bigger than Samsung's. Just two years later, that margin was erased. And by 2006, Sony's market capitalization had dropped to half that of Samsung" ( The Straits Times (Singapore), August 30, 2008). Indian firms like Wipro, Tata Consulting Services and Infosys are buying out rivals and strategic partners in Europe and the US. Korea Development Bank is set to become the savior of Lehman Brothers, the troubled investment bank. Our very own Petronas has ventured well into the deepest oil producing regions of the African continent. A Malaysian company built the Rajiv Gandhi International Airport in Mumbai. The list goes on.

The point of orbis unum is is this : Merit thumps everything else.

In a world where boundaries are blurred by interdependent economies and production systems, more Malaysian companies need to wake up to the fact that the modern world owes them nothing. They have to venture out of this safe harbour we call home and get their hands dirty and bloodied in foreign lands. They need to become adventurous, take calculated risks and find niche markets where they can make a difference. The Indians and Chinese and to a lesser extent the Israelis have learnt this well. Today they have practically carved out little kingdoms for themselves. The western world may not admit to this openly but they are now looking at these 3 economies with envy as they have gone and done business with people and nations that the rest of the world had relegated to the footnotes of world economic-politics. They have embraced technologies and ideas that has signalled the arrival of a mini Renaissance.

Orbis unum means competition is based on knowledge. Knowledge that are cutting edge in nature. Knowledge that enhances every aspect of the product or services that we sell. Knowledge that is integrated into every aspect of the business process : Product design, packaging, marketing,etc. In essence, and I have said this many times, it is knowledge that gave birth to orbis unum/globalization and it is through knowledge alone that Malaysian companies will survive.

I visited the Singapore Night Safari last Saturday. The place was great. The proximity to the animals was exciting. But, the real difference was made by the tour guides who were so knowledgeable! The 'products' were there but the knowledge made the difference.

Can we say the same of our Zoo Negara....or our GLCs and MNCs?