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Sunday, October 27, 2013

Changing mindset is the key to strategic thinking

Ateneo Professor on Entrepreneurship

AGSB, Makati City Philippines | October 27 2013October 27, 2013



I was a witness to another defense of a strategic paper, the capstone of the MBA student requirements for graduation.  The defender is a finance person of a power company;  and she kept on answering that she does not know this development on external environment because she is the finance person and what is preventing her from thinking strategically is that perception and mindset that she can look at the company business from the standpoint of a finance person.  And when asked on technical matters, she would not know how to answer.

Because of this, she was not up to date on the following:  renewable energy, the state of black technology vs green technology abroad and their effect on the P n L. This looks demanding and exacting but I think a graduate student must be a this level.

I noticed also that while the business is not responsive to the environment, the senior executives of their company as well as the student just looks at the preservation of the company and not focusing on innovating and bringing it up par to world standards, making this more competitive.  They are in the survival mode.

                                 



Friday, October 25, 2013

Another case of rearview mirror strategy on a real estate development company

Ateneo Professor on Entrepreneurship



I recently got the news that a strama defense scheduled tomorrow has been postponed for some reasons, according to the chair for the subject. The strama paper covered two companies:  the holding company and the operating company and is rather confusing as to which he discusses in various parts of the paper.  That is good news because it is a bad strategy.  The student merely repeated what they did before as the first project. A clear case of rearview mirror mentality/strategy



The paper are silent on the following:

Customers  - PTM

Product, mvp and how they impact the customer

The opportunities to be seized

While the paper was profuse on data regarding the industry:   office buildings, hotels, etc and their rent, the proposed project (plan) was unclear as to what opportunity shall be seized by the company including the features that will appeal to the intended market:  price, amenities, service, etc.

What wouldbe compelling about their new project/product? Why would people buy this project instead of other projects? 


Thursday, October 24, 2013

Do entrepreneurs have gifts of intuition?

Ateneo Professor on Entrepreneurship

Why are entrepreneurs, who are not MBAs or DBAs so rich unlike diploma laden graduates?  Is it because of luck or intuition?  Is being a successful entrepreneur a gift which everybody was not given?

Our class had a guest, a grandson of a famous textile magnate industrialist, who told a story about his grandfather.  The experts, engineers and consultants spent the whole day presenting to him a cement factory that was planned in Iligan City.   Everybody told the grandfather, including the grandson, that the plant should not be built.  And they were amazed, that his grandfather, after listening the whole day to the experts, the engineers why the plant should not be built, ordered the plant to be built anyway.  What a high school graduate, against all logic to go ahead?  The plant was built;  they had no choice except to follow the patriarch.  And lo and behold, the cement plant was successful. What happened here?  Did he have a gift? Why was his decision correct?

is this the real stuff successful entrepreneurship is all about? That is why they are so good and successful?

As I listened to the interview of JG at Asia news, he kept on mentioning industries that he went into just because he liked them, and felt that they are good businesses, without the benefit of market research.  Does JG have a third eye that he can predict that he will be successful? 

To be different, you have to be different and counter intuitive.  Here are some tips from Forbes

32 quotes every entrepreneur should live by from Forbes

Top 32 Quotes Every Entrepreneur Should Live By

The nature of being an entrepreneur means that you fully embrace ambiguity and are comfortable with being challenged regularly. Choosing this career path is completely irrational because the odds of succeeding are dismal, but most succeed because of their unwavering belief, laser focus on delivering and persistence.
Starting a company is a riveting roller coaster of emotions with tremendous highs and at times, difficult lows, but one thing that always helps me through the ups and downs is to connect with some of the greatest minds. Below are just a few of my favorite quotes:
1. “The best way to predict the future is to create it.”
- Peter Drucker

2. “Winners never quit and quitters never win.”
- Vince Lombardi
3. “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
- Steve Jobs
4. “My biggest motivation? Just to keep challenging myself. I see life almost like one long University education that I never had — everyday I’m learning something new.”
- Richard Branson
5. “Every time you state what you want or believe, you’re the first to hear it. It’s a message to both you and others about what you think is possible. Don’t put a ceiling on yourself.”
- Oprah Winfrey
6. “It’s fine to celebrate success but it is more important to heed the lessons of failure.”
- Bill Gates
7. “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
- Warren Buffett
8. “One of the huge mistakes people make is that they try to force an interest on themselves. You don’t choose your passions; your passions choose you.”
- Jeff Bezos
9. “I have not failed. I’ve just found 10,000 ways that won’t work.”
- Thomas Edison
10. “Logic will get you from A to B. Imagination will take you everywhere.”
- Albert Einstein
11. “As long as you’re going to be thinking anyway, think big.”
- Donald Trump
12. “Success is walking from failure to failure with no loss of enthusiasm.”
- Winston Churchill
13. ”Genius is 1% inspiration, and 99% perspiration.”
- Thomas Edison
14. “Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”
- Mark Twain
15. “The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.”
- Vince Lombardi
16. “If you cannot do great things, do small things in a great way.”
- Napoleon Hill
17. “I don’t know the key to success, but the key to failure is trying to please everybody.”
- Bill Cosby
18. “Success is not what you have, but who you are.


Top 32 Quotes Every Entrepreneur Should Live By

The nature of being an entrepreneur means that you fully embrace ambiguity and are comfortable with being challenged regularly. Choosing this career path is completely irrational because the odds of succeeding are dismal, but most succeed because of their unwavering belief, laser focus on delivering and persistence.
Starting a company is a riveting roller coaster of emotions with tremendous highs and at times, difficult lows, but one thing that always helps me through the ups and downs is to connect with some of the greatest minds. Below are just a few of my favorite quotes:

19. “Entrepreneurship is living a few years of your life like most people won’t so you can spend the rest of your life like most people cant.”
- Warren G. Tracy’s student
20. “To win without risk is to triumph without glory.”
- Corneille
21. “Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.”
- Mark Twain

22. “There is only one success- to be able to spend your life in your own way.”
- Christopher Morley
23. “Whatever the mind can conceive and believe, the mind can achieve.”
- Napoleon Hill
24. “Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.”
- Albert Schweitzer
25. “What is not started will never get finished”
- Johann Wolfgang von Goethe
26. “When you cease to dream you cease to live.”
- Malcolm Forbes
27. “Formal education will make you a living; self-education will make you a fortune.”
- Jim Rohn
28. “The most valuable thing you can make is a mistake- you can’t learn anything from being perfect.”
- Adam Osborne
29. “A leader is one who knows the way, goes the way, and shows the way.”
- John C. Maxwell
30. “The function of leadership is to produce more leaders, not more followers.”
- Ralph Nader
31. “Choose a job that you like, and you will never have to work a day in your life.”
- Confucius
32. “Your most unhappy customers are your greatest source of learning.”
- Bill Gates

Tuesday, October 22, 2013

Steve Case founder of AOL, now head of VC Revolution advocates entrepreneurship for the rest of America

Ateneo Professor on Entrepreneurship

 

From HBR blogs, October 16, 2013

Start ups across America from Tech Cocktail

There are two pictures of business in America, according to Steve Case, founder of AOL, now turned Venture Capitalists (VC) - the entrepreneurial Silicon Valley that dwarfs the rest of America in innnovation and entrpreneurship;  and the rest of America which is risk averse.

Americas growth has been founded on entrepreneurship for the last 250 years;  its currency despite huge debts and deficit continue to be the darling of the rest of the world because it is perceived still as the bastion of entrepreneurship.  But with increasing regulation, huge wages, the Obama care, there is a doubt as to what is going to happen to innovation and entrepreneurship in USA.

Big business is OK but it does not create more jobs.  Start ups which scale up create job.

In relation to capital entrepreneurship, VCs play a big role in developing across industries in USA. It used to invest in techie companies;  energy, IT, software apps, but Case advocates that VC can play a big role.  He also talks about immigration laws.  The best from the rest of world come to the USA to enroll in high tech universities like MIT, Stanford, and now, the US govt is kicking them out

At this point it is important to know how to interact with the govt with the center of gravity being at the govt right now  with regards to entrepreneurship

Steve Case Quotes

Google shares breach the $1,000 per share mark, the rest of techie stocks follow

Ateneo Professor on Entrepreneurship

Repost from CNBC


                                  


 

During the weekend, there was a significant news that Google shares reached the $1,000 per share mark lifting the techie stocks along with the rise.  The gain was on video and mobile advertising which rose by 23%.  You tube is generating revenues for Google

Google is known for the various products:   Nexus lines of phones, Chrome browser, You tube, experienced a 32% growth from the rest of the world;  with more than one billion smartphone applications, Google gets revenue  from Google play where it sells Google apps

Google stock prices went up by 38% this year, rewarding investors in Funds like $101 billlion Contrafund, which is being managed by star picker Will Danoff.  Some of his portfolion includes Tesla Motors, and Facebook

What does this news mean to entrepreneurs?  To the GSB students





JP Morgan "robbed" for not toeing the line(?); violated basic rule of EA - not adapting to PESTEL

Ateneo Professor on Entrepreneurship

 

 From in a Gist

From Newsmax repost October 22, 2013

Many newspapers in the states screamed in the headlines that JP Morgan was "robbed" in the $13 billion settlement with the US government announced last week.  Some quarters say that this was a payback by this current govt because its CEO did not toe the line and was critical of the current government.  Another IB, also with the same securities, but close to the administration  was spared.

To top it all, 80% of the securities were acquired from the failing banks:  Bear Stearns and Washington Mutual.  JP Morgan took over these securities, at the request of the US government to stave off financial meltdown.

But JP Morgan violated the basic rule in EA, PESTEL -  never mess up with the politics;  ride along with the tide/wave

P.S

I went to a wake early this morning.  A friend lawyer died of pneumonia.   Luck had it that the eldest brother works at JP Morgan Chase in FB office in Manila.  And guess what - he works for mortgage bankin group and we engaged so much on this topic; and he was very conversant on this topic while claiming he is just an ordinary employee.  He is a very bright and enlightened JP Morgan employee 

                


                                      

Another strama on a power company whose strategy is not responsive to current power situation and innovations

                                           

                           This l gW coal plant in Australia will be closed in 2014


I have read another strategic management paper on power generation.  The strategy being proposed is not responsive to the following external developments:

1.  innovation in renewables;  lower operating cost on renewables especially solar and wind;

2.  green innovation vs black technology (coal fossil fuel)

3.  effect of black technology on climate change:  global warming causing severe typhoon and resulting costs from flooding etc.

4.  concern on the environment;   the carbon emission from bunker fuel may hurt the host province which prides itself in being green and eco tourism; as one of the heritage sites in natures beauty.

5.  The increase in tourism ups the demand for power.

6.  Also the lack of power in Northern side of the province (a tourist spot) is not being addressed and the possibility   (Electricity in resort town only from 2pm to 6 am) of more brown outs in the island province ( From Interasksyon - brown outs in island province)

Again, I would like to repeat my criticism of the old strategy (without creativity - Purple Cow and Blue Ocean Strategy)  The strategy being presented is just a rehash of the continuation of the past (a rear view mindset), being more efficient, increasing market share.  Nothing new, nothing unusual.  Without the commitment to change over the long term, the following may eventually happen to the small power gen:

Shuttering of the Mallerawang coal plant in Australia due to changing market conditions.  Stiff carbon tax/fines and competition from low cost rooftop solar panels have made the coal plant uncompetitive.  It should be noted that most coal in the world comes from Australia (the whole of Sydney sits on top of a very large coal deposit)

The link also mentions the decline in the load factor of old black technology in Europe;  it is down to 49% in 2012.

The strama paper is oblivious to these external factors/technological development;  and even the last E of PESTEL  -  ecological






citi-baseload-deline




Proposed plan to put up coal fired power plants in Central P to supply 45 mW stirs up debate.  Coal plants are the dirtiest and emit a lot of carbon contributing to climate change.

SPECIAL REPORT on Henry Sy by Akeel Dalisay

Good day Sir! Here's the link to the video and slideshare of my special report on Henry Sy.
Thanks!

Akeel D. Dalisay
Junior Valuation Assistant
China Banking Corporation


Friday, October 18, 2013

Sports and Business Leadership/Enterpreneurship

Ateneo Professor on Entrepreneurship

 

From Industry Week

What is the relationship between sports and business leadership.  Sportsman have mental and physical toughness to work out a plan, and I have believed that many sportsman/athletes eventually end up successful businessmen.  Take Shaq O Neal who now own franchise in basketball team, Magic Johnson.  I know of several cyclists, marathoners, tri athletes who are successful businessmen in their own right.

Stephenie Streeter, CEO of Libbey, a glass making company is one such person.  She used to be a member of Stanford Women's Basketball Team, was a trustee of US Olympic Committee,

She says that an athletics is all about team, and winning.  And atheletes always have very strong competitive spirit.  Athletes too have leadership in what they do.

Talk about athletes negotiating hard for their professional fees (and even game fixing fees he he he)

     

Collaboration makes start up and innovation easier - a start up makes collaboration easier

Ateneo Professor on Entrepreneurship


                                               
 

From Techcrunch

In our entrep class, almost half of the graded class work is group work. The idea comes from Maxwell's law of the the big picture, ie that nothing gets done without group effort these days. You might not make it if you are alone.

Open source software which allows more people to work on your ideas, increases pace of development.  Collaboration helps start up takes off faster.

Collaboration is now the buzz word these days for start up.  One such start up, the CollabFinder makes such process easier

Is this like crowdsourcing?








To be a success, you have to remember your screw ups - write your failure resume

Ateneo Professor on Entrepreneurship

                                         Photo of Tom Kelley



From Fast Company by by David and Tom Kelley  a repost

What is significant about this is its relation to our recent Special Report is that the author founded Ideo. Tom founded the D School at Stanford U. David and Tom Kelly are co authors of recent book "Creative Confidence, Unlocking the Creative Potential in Us All." Tom was an author of the book Art of Innovation (Ideo) and Ten Faces of Innovation (Ten Faces of Innovation infographic)

Failure resume/catalogue

The authors prescribe making your own screw up catalogue (or resume)  And we take note that innovation is a numbers game.  It is sometimes a game of hit and miss.  And the success is a result of luck or serendipity.

To learn from failure, you have to own it. You have to be realistic and make no alibis about it. You can enhance your persona through candor, humility,  and honesty. Only then can you move on towards success.  Some professional cloud their thinking by blaming market corrections, economy, etc. rather than themselves for making a wrong assessment, call or decision (you call that hubris?)

One such company that catalogue theirs miscues is Bessemer Venture Capital and has made a site of Top Exits and their failures are catalogued under the title" Anti Portfolio".  They passed up opportunity for Paypal, and even Fed Ex which they passed 7x which is now currently worth $30B. Another advocate of anti portfolio is David Cowan, who passed up Larry Page and Sergi Brin who worked on Google at the garage of a neighbor.  Forbes Midas List ranks as one of the top VC who turns many ideas into gold.  Did his failure experience help him

Fail Con

Failure conferences are now common and Tina Sellig Prof at Stanford (and one those who influenced the author at Bangkok REE conference on innovation) asks students for failure resumes.  Coming to grips with failure forces the individual to learn from mistakes to do much better.  Tina is the Exec Director of Stanford Technology Ventures which nurtures future entrepreneurs.  She wrote a book What I Wish I Knew when I was 20

                           


              





                                      

Failcon fails to fail

US averts default/financial crisis, ends 16 day governement shutdown

Ateneo Professor on Entrepreneurship

From Reuters | October 17, 2013 4:24 pm EDT

                                          

USA averted a financial crisis, a possible debt default and downgrade as he hastily signed into a law a bill passed by both houses that will temporarily pass a budget and debt limit through the next 90 days (and then another impasse)  US Pres. Obama hinted a rebuke on the Republicans in the Congress for being responsible for the crisis.

However, the Republicans blamed Obama for not being in the fight as the crisis loomed;  he refused to negotiate with the Republicans.

In the class I discussed the dilemna:  what would you do with USA which has more than $16 trillion in debt;  China holds more than $ l trillion in trillions, and $ 2 trillion in other forms of assets invested in USA.  Some suggested to cut spending and deficit.  That is what Republicans are after in negotiations -  spending cuts.  Nowhere in the history of USA has debt and deficit ballooned than in the time of the present administration.

With the crisis, and the image of Republicans declining, they being blamed for the shutdown, they have to cave in and give up the fight.

What will happen next after February 7, 2014


                            

Observations/analysis of a strama defense on a FMCG multinational business unit

Ateneo Professor on Entrepreneurship

 

I was surprised that I was invited again to sit at a panel of strama defense.  For unknown reasons,  I was never invited for almost a year.  Well, some of male professors have been notorious for being critical and strict with many defenders.  And for right reasons:  we want to ensure:    the quality of the GSB, and we want the student to proudly carry the title "Master"  The school has been branded as diploma mill for GSB.

Today I am back to my element.  While I gave passing grade to the student these are my observations:

1.  He discussed a business unit,  a multinational engaged in FMCG distribution and marketing, which in reality does not have degrees of freedom to implement the strategies. I thought the paper was on a SBU? He did not even mention the legal entity of the local business unit? or the business model.    He mentioned such limitations as:

     1.  Carrot and stick system of reducing AP because of flat, declining sales

     2.  The marching orders are from the regional head/office;

     3.  He blames the corporate stock outs for this problem, and I told that for a year or two that could have been corrected;  something external is amiss?

I thought that only strategic business units are subject of strama.?

2.  The student had audicious goal of achieving x number of billions of sales as his vision/goal for the next several years, yet:

     1. He could not clearly explain why the sales was flat.  He blames corporate woes including lack of correct execution;  but that would not sufficiently explain the flat sales

    2, He portrays the competition to be medium from several quarters and yet the sales does not keep up with growth of the economy and other external factors.  He failed to mention such developments as:    cheap substitutes, other product substitutes for feminine hygiene, and other developments in health care.   His mindset has been strictly pharma:  there are many alternative medicine that it may be eating into the market share. (I informed him that I write on this topic  Cheapcures)  He and his company may not be seeing reality and these changes.

3.  Consistency in the paper:

    1.  Growth opportunities/large markets were presented as beauty care, OTC, and yet were not present in the EFE, and thus in the strategy.   Thus his plan revolves on the products that they have sold before etc., same old story, me too strategy.

    2. For the IFE he prides the company on high engagement of the people, good culture, and yet states that the internal strategic issue has been that of correct execution  which are rather inconsistent.

I hope the professor in charge has the paper corrected and rewritten.

What has that strama paper achieved for the business and economy?  Not much I guess:

1.  Since this is not an sbu, what the regional office has dictated will be followed;

2.  Since the opportunities were not properly addressed, the x billion additional sales will find difficulty in the achievement.  The competitive pressures are not like wise addressed as well as increasing cost of sales channel.

3.  For the internal strategic issues, ie  that there is a need to address cooperation and coordination  (and the student prides in saying that they have strong adherence to corporate culture) and which is not addressed strongly, the problem will persist, execution will be a problem.

4.  Nothing new was presented except incremental improvements (I was hoping I will be surprised amazed).

At the end of the day, we passed a student who knows how to use strategic tool, but who did not create something new, nor made a dent in the universe. 

He did not rock the boat

Am I a panelist or terrorist?

http://philebookworm.files.wordpress.com/2012/07/img_00000153.jpg