THE MANILA TIMES
Monday, November 24, 2003
Business Times p.B5
http://www.manilatimes.net/national/2003/nov/24/yehey/business/20031124bus6.html
LEARNING AND INNOVATION
By Moje Ramos-Aquino
Hope is not a strategy
HOPE is not a Strategy. I am struck by the title of this book by Rick Page (Nautilus Press). It is not about strategic thinking and planning. It is about competitive selling. And we shall discuss this topic some other time.
Let me take off from there: hope is not a strategy. I have facilitated a number of strategic thinking and planning workshops and I have observed participants' mood change from anxious and tentative (at the briefing to start the process) to hopeful and eager (at the workshop proper and the ensuing consultation sessions).
Hope is not the strategy, but the strategy itself raises hope, albeit amid great difficulties, in the mind and heart of everyone. Having a strategy is the strategy at which everybody in the organization hitches their personal and organizational aspirations. The strategy gives everybody a sense of direction and guides them marching happily to the same beat. Your strategy also allows you to control competition.
Jim Mooney, chief executive officer of OM Group, said, "It's probably the greatest war game in the world."
"You create a vision, develop a strong army, bring on new weapons and bring on new growth. You don't let any of your people get hurt and it's all nonviolent," Mooney said. "How much more fun can you have?" Once you know exactly what you are in business for, it is time to deploy it. It is equally important that your primary stakeholders know clearly your strategic driver. They are your investors, employees, customers, suppliers and the community where you operate. You need them to go along with you all the way."
You need to build your strong organization and not leave anything to chance. You need to determine, and develop over time, your core competencies or areas of excellence to sustain your strategy successfully for the long haul. Your strategy could become stronger or weaker depending on how you act on it.
These areas of excellence are what author Michel Robert defines as describable skill, competence or capability that a company cultivates to a level of proficiency greater than anything else it does and particularly better than any competitor does.
In his book, Strategy Pure & Simple (McGraw-Hill Inc.) Robert suggests the following areas of excellence for each of the 10 driving forces that we discussed in this column early on: product and process development and service (product/service concept-driven strategy); market or user research and user loyalty (market/user class-driven strategy); manufacturing or plant efficiency and substitute marketing (production capacity/capability-driven strategy); research and application marketing (technology/know-how-driven strategy); recruitment of sales people and effectiveness of the selling method (sales/marketing-driven strategy); product and services that use or enhance distribution system and optimize effectiveness of system (distribution method-driven strategy); exploration and recovery (natural resources-driven strategy) and; portfolio management and information systems (size/growth or return/profit-driven strategy).
Robert says that the deliberate cultivation of strategically important capabilities, usually two or three of them, keeps an organization's strategy strong and healthy and gives it an edge over its competitors. Losing these areas of excellence weakens the strategy and eliminates your competitive edge. And of course, you don't want your people to lose that hopeful and eager outlook and go back to their anxious and tentative mood.
If I may add, the sooner you develop these strategic capabilities, the more formidable your organization becomes. As Regis McKenna says, "Speed has become an important element of strategy."
Moje Ramos-Aquino is president of Paradigms & Paradoxes Corporation and facilitates Strategic Thinking and Planning programs. Her email address is moje@mydestiny.net
Monday, November 24, 2003
Monday, November 17, 2003
Strategy: Creating value for stakeholders
THE MANILA TIMES
Business Times p.B5
Monday, November 17, 2003
http://www.manilatimes.net/national/2003/nov/17/yehey/business/20031117bus15.html
LEARNING AND INNOVATION
By Moje Ramos-Aquino
Strategy: Creating value for stakeholders
IS your strategy creating value for your stakeholders and marketing your products and services? Or is it simply telling you how to run your business or how to play ball with your competitor? If it is either of the last two, you don’t have a strategy. What you have is a short-term plan.
According to John W. Teets, chairman of Greyhound, Inc., a stategist’s job is “to see the company not as it is . . . but as it can become.”
During the Ayala Shares forum held recently at On Stage, Greenbelt, Ramon “Mon” Medina, managing director of the Ayala Corp., said that they continuously question their business decisions: Is Ayala Corp. necessary to add unique value to the continuous operations of its subsidiaries so that they become number one or number two in their industry?
If the answer is negative, they let go of the subsidiary. For example, RFM/Purefoods. Although it was making lots of profits, it was sold because, after managing RFM/Purefoods for a while, the Ayala Corp. realized it couldn’t be number one or two in the food business.
Like any holding or managing organization, the Ayala Corp. is driven by profit and growth. Being number one or two means optimum profitability.
Ayala Corp. consists of 64 companies in the areas of banking and finance services, telecom, real estate, international trade, utilities, electronics, information technology, automotive and others.
It was a closed family-owned corporation until 1974. In 1976, it went public and listed at the Makati Stock Exchange.
It has approximately 25, 0000 managers and employees. All their operating companies have been managed by professional managers since 1956.
Mon revealed that over the last 45 years, the Ayala Corp. has undergone at least three major organizational transformations, namely:
• Professionalization of the management—started in 1956 up to the present.
• Going public and promoting good governance—late 1970’s up to present.
• Sustaining the Flow of River Ayala, a metaphor they use to describe their transformation into the 21st century. It was begun in the mid-90s and continues to the present. Their business transformation was done through strategic partnerships while the human resource transformation was done through rigorous talent management.
In all these transformations, they were always deliberate and purposive. They would always ask themselves: “What business are we to be the ‘natural owners’ (a parent company that can contribute unique value to a subsidiary) of?” This question connects the dots between Ayala Corp. and its subsidiaries. It is the very question that keeps them true to their strategic business idea.
Having a clear positive answer to that all-important question, they proceed to ask themselves:
• How do we do business?
• Where do we do business?
• With whom do we do business?
• How relevant is Ayala Corp. as a holding company?
• What role should Ayala Corp. pursue as a holding company?
What gives a company a strategic advantage is their difference from other companies that puts them above the rest, particularly competition. Ayala, indeed, is unique and is a trusted business organization.
Mon said that the Ayala name has become synonymous to the word “trust” through its 169 years of existence. They take care not to break that trust bestowed on them by their various stakeholders and business partners. Trust, indeed, takes time and effort to establish, but takes only one small incident to lose.
Indeed, as Jeffrey Rigsby and Guy Greco wrote in their book, Mastering Strategy (McGraw-Hill), “An organization’s competitive advantage must be rooted in its strategic thought process and strategic positioning. It must be consistently challenged and refined to respond ahead of the competition.”
Moje Ramos-Aquino is president of Paradigms & Paradoxes Corp. and assists companies in their Strategic Thinking and Planning initiatives. Her email address is moje@mydestiny.net.
Business Times p.B5
Monday, November 17, 2003
http://www.manilatimes.net/national/2003/nov/17/yehey/business/20031117bus15.html
LEARNING AND INNOVATION
By Moje Ramos-Aquino
Strategy: Creating value for stakeholders
IS your strategy creating value for your stakeholders and marketing your products and services? Or is it simply telling you how to run your business or how to play ball with your competitor? If it is either of the last two, you don’t have a strategy. What you have is a short-term plan.
According to John W. Teets, chairman of Greyhound, Inc., a stategist’s job is “to see the company not as it is . . . but as it can become.”
During the Ayala Shares forum held recently at On Stage, Greenbelt, Ramon “Mon” Medina, managing director of the Ayala Corp., said that they continuously question their business decisions: Is Ayala Corp. necessary to add unique value to the continuous operations of its subsidiaries so that they become number one or number two in their industry?
If the answer is negative, they let go of the subsidiary. For example, RFM/Purefoods. Although it was making lots of profits, it was sold because, after managing RFM/Purefoods for a while, the Ayala Corp. realized it couldn’t be number one or two in the food business.
Like any holding or managing organization, the Ayala Corp. is driven by profit and growth. Being number one or two means optimum profitability.
Ayala Corp. consists of 64 companies in the areas of banking and finance services, telecom, real estate, international trade, utilities, electronics, information technology, automotive and others.
It was a closed family-owned corporation until 1974. In 1976, it went public and listed at the Makati Stock Exchange.
It has approximately 25, 0000 managers and employees. All their operating companies have been managed by professional managers since 1956.
Mon revealed that over the last 45 years, the Ayala Corp. has undergone at least three major organizational transformations, namely:
• Professionalization of the management—started in 1956 up to the present.
• Going public and promoting good governance—late 1970’s up to present.
• Sustaining the Flow of River Ayala, a metaphor they use to describe their transformation into the 21st century. It was begun in the mid-90s and continues to the present. Their business transformation was done through strategic partnerships while the human resource transformation was done through rigorous talent management.
In all these transformations, they were always deliberate and purposive. They would always ask themselves: “What business are we to be the ‘natural owners’ (a parent company that can contribute unique value to a subsidiary) of?” This question connects the dots between Ayala Corp. and its subsidiaries. It is the very question that keeps them true to their strategic business idea.
Having a clear positive answer to that all-important question, they proceed to ask themselves:
• How do we do business?
• Where do we do business?
• With whom do we do business?
• How relevant is Ayala Corp. as a holding company?
• What role should Ayala Corp. pursue as a holding company?
What gives a company a strategic advantage is their difference from other companies that puts them above the rest, particularly competition. Ayala, indeed, is unique and is a trusted business organization.
Mon said that the Ayala name has become synonymous to the word “trust” through its 169 years of existence. They take care not to break that trust bestowed on them by their various stakeholders and business partners. Trust, indeed, takes time and effort to establish, but takes only one small incident to lose.
Indeed, as Jeffrey Rigsby and Guy Greco wrote in their book, Mastering Strategy (McGraw-Hill), “An organization’s competitive advantage must be rooted in its strategic thought process and strategic positioning. It must be consistently challenged and refined to respond ahead of the competition.”
Moje Ramos-Aquino is president of Paradigms & Paradoxes Corp. and assists companies in their Strategic Thinking and Planning initiatives. Her email address is moje@mydestiny.net.
Monday, November 10, 2003
Journey on entrepreneurship: Constant reinvention
THE MANILA TIMES
Business Times. P.B5
Monday, November 10, 2003
http://www.manilatimes.net/national/2003/nov/10/business/20031110bus17.html
LEARNING AND INNOVATION
By Moje Ramos-Aquino
Journey on entrepreneurship: Constant reinvention
HAVING clearly delineated your strategic driving force, how do you use it to survive, compete and, eventually, lead in your business arena?
On Friday, at a forum sponsored by Ayala Corp., Cesar Manreal and Oscar “Nonong” Contreras, Jr., shared with us their Globe Telecom Journey to success. Their story is a very good example of how to pursue what is driving the business.
Nonong is now managing director of Ayala Corp. and consultant at Globe. He said that in Globe, they have defined their strategic context as operational excellence, customer intimacy and product leadership. Having done that, in 1999, they identified their core business competences. These are business acumen/knowledge, communication, customer focus, decision-making and accountability, leadership, teamwork, creativity and innovation, planning and organizing and results orientation.
To push their strategy and to effect and manage change, Globe embarked on a master implementation plan that they labeled as “Advance.” They concentrated on improving the competencies of their people, on performance management, on career and succession management, on rewards and recognition system and on relentless communication to all stakeholders.
As a result of this conscious effort, Nonong said that the culture and environment of Globe has positively changed. Their structure has become more efficient. Their operation has become very profitable.
Cesar, for the most part, shared his experience in Silicon Valley, California, which he is now bringing to Globe as the new head of Human Resources Group. He discussed some best practices for focus, speed and flexibility of successful Silicon Valley companies.
One of the significant findings of a study of these companies showed that all of them excelled in all four of these competencies—strategy, execution, culture and structure. Also they mastered at least two of these other competencies—talent management, innovation, leadership, and mergers and partnerships. This is part of the Daniel’s Method called 4 x 2.
Globe has achieved excellence in these four core competencies and has mastered talent management and mergers and partnership. No wonder, as Nonong said, they are now earning more than their sister company, Bank of the Philippine Islands.
Many companies seem to have very viable strategies, but after a while, they disappear as quickly as they appear in the business horizon or they are bought by competition. Some have endured through decades and centuries of robust operations pursuing their vision and mission while religiously living their core values and enhancing their capabilities. Examples are those that Jim Collins wrote about in his books Built to Last and Good to Great (HarperBusiness), like Abbott, Gillette, Pitney Bowes and Walgreens.
Here in the Philippines, we have ABS-CBN, which recently celebrated its golden anniversary. We also have the University of Santo Tomas, which is older than Harvard. There is Max’s Chicken and BPIs all over the place, Alpha School Supplies in Davao, Philippine Airlines, Biscocho House in Iloilo, Session Café in Baguio City, and many others. First Philippine Industrial Corp. and Union Galvasteel Corp. have not only survived competition and various economic and political crises, but they continue to lead in their respective industries.
Please take note that all these organizations have stuck to their original business idea while constantly reinventing themselves through technology and talent management. Reminds me of what Seth Godin, Idea Merchant, said, “an idea that wins ultimately does so because of intelligent seeding.”
Personal. Prayers for a blissful married life to Vladimir Tuazon and Abigail Mustard who are tying the knot this November 15 at the Nuestra Señora de Gracia Church and Jeff Pecaña and Ginny Cabalu, on November 29 at the Archbishop’s Palace.
Moje Ramos-Aquino is president of Paradigms & Paradoxes Corp., and assists companies in their Strategic Thinking and Planning. She awaits your feedback at moje@mydestiny.net.
Business Times. P.B5
Monday, November 10, 2003
http://www.manilatimes.net/national/2003/nov/10/business/20031110bus17.html
LEARNING AND INNOVATION
By Moje Ramos-Aquino
Journey on entrepreneurship: Constant reinvention
HAVING clearly delineated your strategic driving force, how do you use it to survive, compete and, eventually, lead in your business arena?
On Friday, at a forum sponsored by Ayala Corp., Cesar Manreal and Oscar “Nonong” Contreras, Jr., shared with us their Globe Telecom Journey to success. Their story is a very good example of how to pursue what is driving the business.
Nonong is now managing director of Ayala Corp. and consultant at Globe. He said that in Globe, they have defined their strategic context as operational excellence, customer intimacy and product leadership. Having done that, in 1999, they identified their core business competences. These are business acumen/knowledge, communication, customer focus, decision-making and accountability, leadership, teamwork, creativity and innovation, planning and organizing and results orientation.
To push their strategy and to effect and manage change, Globe embarked on a master implementation plan that they labeled as “Advance.” They concentrated on improving the competencies of their people, on performance management, on career and succession management, on rewards and recognition system and on relentless communication to all stakeholders.
As a result of this conscious effort, Nonong said that the culture and environment of Globe has positively changed. Their structure has become more efficient. Their operation has become very profitable.
Cesar, for the most part, shared his experience in Silicon Valley, California, which he is now bringing to Globe as the new head of Human Resources Group. He discussed some best practices for focus, speed and flexibility of successful Silicon Valley companies.
One of the significant findings of a study of these companies showed that all of them excelled in all four of these competencies—strategy, execution, culture and structure. Also they mastered at least two of these other competencies—talent management, innovation, leadership, and mergers and partnerships. This is part of the Daniel’s Method called 4 x 2.
Globe has achieved excellence in these four core competencies and has mastered talent management and mergers and partnership. No wonder, as Nonong said, they are now earning more than their sister company, Bank of the Philippine Islands.
Many companies seem to have very viable strategies, but after a while, they disappear as quickly as they appear in the business horizon or they are bought by competition. Some have endured through decades and centuries of robust operations pursuing their vision and mission while religiously living their core values and enhancing their capabilities. Examples are those that Jim Collins wrote about in his books Built to Last and Good to Great (HarperBusiness), like Abbott, Gillette, Pitney Bowes and Walgreens.
Here in the Philippines, we have ABS-CBN, which recently celebrated its golden anniversary. We also have the University of Santo Tomas, which is older than Harvard. There is Max’s Chicken and BPIs all over the place, Alpha School Supplies in Davao, Philippine Airlines, Biscocho House in Iloilo, Session Café in Baguio City, and many others. First Philippine Industrial Corp. and Union Galvasteel Corp. have not only survived competition and various economic and political crises, but they continue to lead in their respective industries.
Please take note that all these organizations have stuck to their original business idea while constantly reinventing themselves through technology and talent management. Reminds me of what Seth Godin, Idea Merchant, said, “an idea that wins ultimately does so because of intelligent seeding.”
Personal. Prayers for a blissful married life to Vladimir Tuazon and Abigail Mustard who are tying the knot this November 15 at the Nuestra Señora de Gracia Church and Jeff Pecaña and Ginny Cabalu, on November 29 at the Archbishop’s Palace.
Moje Ramos-Aquino is president of Paradigms & Paradoxes Corp., and assists companies in their Strategic Thinking and Planning. She awaits your feedback at moje@mydestiny.net.
Monday, November 3, 2003
Making Big Decisions
THE MANILA TIMES
Business Times p.B5
Monday, November 3, 2003
http://www.manilatimes.net/national/2003/nov/03/business/20031103bus8.html
LEARNING AND INNOVATION
By Moje Ramos-Aquino
Journey on entrepreneurship: Making big decisions
In his book Strategy Pure & Simple, Michel Robert wrote: “Once a company’s management understands which driving force is at the root of the company’s strategy, decisions about the types of products, markets and users that will bring competitive advantage are made more successfully.”
You can’t be and you can’t sell everything to all possible markets and users at the same time. There is no Jack of all-trade company. Even variety stores don’t carry everything. If they carry a lot of things, they are still known for one particular line of products or service. Otherwise, they are carrying a lot of non-moving goods and a huge inventory, which represents sank costs and losses.
Even variety shows on television and radio are focused on a certain aspect of the show, mostly the host/s or a certain attractive segment that appeal to most fans. That is why variety shows try to present a single theme for its regular presentations. They can’t be all things to all fans. David Letterman is the single, most important factor in the success of The Late Show. His guests add spice and glitter to his repertoire of gigs. People will continue to watch Dave with or without the Top Ten List. Dave provides the strategic heartbeat of the show and everything about the show revolves around him. Without him, there is no Late Show.
This is what is termed strategic driver that establishes the parameters by which critical decisions are made. Over time this driver shapes the landscape where the business operates and determines the identity of the organization. We have discussed eight such most important strategies. We are down to two as we move on our Journey on Entrepreneurship. These last two are return/profit driven strategy and size/growth-driven strategy.
All business organizations are organized for profit but they are not necessarily driven by profit. Even so-called nonprofit organizations need to realize some profits to cover expenses for their day-to-day operation and their projects—especially these days when traditional fund sources are scarce, if not totally unavailable. However, although these organizations desire profit, they do not necessarily exist for profit only.
The Rotary Foundation for Soup Kitchen, Food Bank and Training Center managed by Judge Lore Veneracion under the auspices of the Rotary Club of Quezon City North is reeling under the rising cost of operations and increasing number of recipients for their charities. There are no new donations coming in. The Foundation is raising funds through its various money-making ventures like water filtration, bakery, candle-making, cafeteria and catering services, etc. (If you need any of these products and services for your Christmas give-aways or parties, please call them at 939-8288.)
There is no mistaking, though, that conglomerates or holding companies are there to increase shareholders’ value. The only reason it does business is to earn profit. They form, buy or sell subsidiaries on the basis of return or profit. They even go into unrelated business and acquisition binges for the money. Their driving force is purely profit. Financial institutions such as banks, investment houses, lending companies and pawnshops are similarly driven.
Finally, some businesses are driven by size or growth strategy. Simply for growth’s sake or for economies of scale, they expand and diversify. They probably coined buzzwords such as lateral diversification and backward integration. Sometimes these activities are done without regard for financial gains. Big is beautiful is their motto.
At this point, maybe you have been through several ways of assessing opportunities for your business. You have revisited your goals and objectives for the coming years in your annual planning workshop. You have reviewed the performance of your operating and administrative units. If you are a small enterprise, you review your overall performance.
Having done all that, if you are still finding it difficult to make those big decisions about your products, markets and users, then, you have no strategy in the first place and the future of your enterprise is nowhere in sight.
Moje Ramos-Aquino is the president of Paradigms & Paradoxes Corp. and assists companies in their strategic thinking and planning. Her email is moje@mydestiny.net
Business Times p.B5
Monday, November 3, 2003
http://www.manilatimes.net/national/2003/nov/03/business/20031103bus8.html
LEARNING AND INNOVATION
By Moje Ramos-Aquino
Journey on entrepreneurship: Making big decisions
In his book Strategy Pure & Simple, Michel Robert wrote: “Once a company’s management understands which driving force is at the root of the company’s strategy, decisions about the types of products, markets and users that will bring competitive advantage are made more successfully.”
You can’t be and you can’t sell everything to all possible markets and users at the same time. There is no Jack of all-trade company. Even variety stores don’t carry everything. If they carry a lot of things, they are still known for one particular line of products or service. Otherwise, they are carrying a lot of non-moving goods and a huge inventory, which represents sank costs and losses.
Even variety shows on television and radio are focused on a certain aspect of the show, mostly the host/s or a certain attractive segment that appeal to most fans. That is why variety shows try to present a single theme for its regular presentations. They can’t be all things to all fans. David Letterman is the single, most important factor in the success of The Late Show. His guests add spice and glitter to his repertoire of gigs. People will continue to watch Dave with or without the Top Ten List. Dave provides the strategic heartbeat of the show and everything about the show revolves around him. Without him, there is no Late Show.
This is what is termed strategic driver that establishes the parameters by which critical decisions are made. Over time this driver shapes the landscape where the business operates and determines the identity of the organization. We have discussed eight such most important strategies. We are down to two as we move on our Journey on Entrepreneurship. These last two are return/profit driven strategy and size/growth-driven strategy.
All business organizations are organized for profit but they are not necessarily driven by profit. Even so-called nonprofit organizations need to realize some profits to cover expenses for their day-to-day operation and their projects—especially these days when traditional fund sources are scarce, if not totally unavailable. However, although these organizations desire profit, they do not necessarily exist for profit only.
The Rotary Foundation for Soup Kitchen, Food Bank and Training Center managed by Judge Lore Veneracion under the auspices of the Rotary Club of Quezon City North is reeling under the rising cost of operations and increasing number of recipients for their charities. There are no new donations coming in. The Foundation is raising funds through its various money-making ventures like water filtration, bakery, candle-making, cafeteria and catering services, etc. (If you need any of these products and services for your Christmas give-aways or parties, please call them at 939-8288.)
There is no mistaking, though, that conglomerates or holding companies are there to increase shareholders’ value. The only reason it does business is to earn profit. They form, buy or sell subsidiaries on the basis of return or profit. They even go into unrelated business and acquisition binges for the money. Their driving force is purely profit. Financial institutions such as banks, investment houses, lending companies and pawnshops are similarly driven.
Finally, some businesses are driven by size or growth strategy. Simply for growth’s sake or for economies of scale, they expand and diversify. They probably coined buzzwords such as lateral diversification and backward integration. Sometimes these activities are done without regard for financial gains. Big is beautiful is their motto.
At this point, maybe you have been through several ways of assessing opportunities for your business. You have revisited your goals and objectives for the coming years in your annual planning workshop. You have reviewed the performance of your operating and administrative units. If you are a small enterprise, you review your overall performance.
Having done all that, if you are still finding it difficult to make those big decisions about your products, markets and users, then, you have no strategy in the first place and the future of your enterprise is nowhere in sight.
Moje Ramos-Aquino is the president of Paradigms & Paradoxes Corp. and assists companies in their strategic thinking and planning. Her email is moje@mydestiny.net
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