Thursday, October 25, 2007

Macau, Macao

I have my personal list of 1,000 places I'd like to visit before I die. Tops on my list are Israel, Lebanon, Egypt, Palestine, and countries with significant religious history. I did not plan on going to Macau, but I was influenced by the excitement of Gigie Penalosa and her daughters Iya Prado with bro-in law JP Prado and Carmina about attending the trade shows featuring products from Asia, mostly China and Hongkong. For me, Macau is simply a stopover destination.

And so we went to the huge Venetian Resort Hotel to view the exhibit of Asian craftsmanship and creativity. There were actually two major trade shows ongoing at the same time: 12th Macao International Trade & Investment Fair (MIF) and Mega Macao 2007.

Mega Macao showcased toys and games, gift items, household wares, consumer electronics, advertising and promotional premiums, home textiles, fashion, garments, accessories and lifestyle products. You need more than three days to go around, eye each product closely and talk to the manufacturer to explore possible initial business cooperation.

The toys alone ranged from baby items, baby toys, balls, battery-operated, die-cast metal, educational, electronic, inflatable toys and games, electronic, gaming items, Halloween and carnival items, hobby pieces, plastic toys, pre-school toys, radio-controlled toys, sporting goods, stuffed or plush toys and dolls, toy parts and accessories and travel games. Wow, I did not realize there are that many different varieties of toys and games for all ages.

A buoyant and expectant mood permeated the two shows. Buyers and traders exchanged business cards and promises of future mutual support. Actually the shows were open to traders and buyers only. I was delighted to see a whole row of Filipino manufacturers exhibiting what are distinctly Filipino products made from indigenous materials. They make you proud to be a Filipino. They came from Antipolo, Alabang, Cebu and Iloilo. There were also beautiful local products from Thailand, India, Pakistan, Vietnam and other Asian countries. The products from China are generally common products you see every where you go in the world particularly in Divisoria and Walmart.

At Mega Macao, most products were there for display only but if you insist they sell you one or two pieces. You can order by bulk. It is astonishing to know how cheap the products are from China if you buy them wholesale direct from the factory. They are so cheap and retailers here are making a killing buying from China wholesale and selling those products by piece. They could be marked up a thousandfold. For example, I just bought this headlamp that miners and mountain climbers use (5 LED bulbs) for Php160 from my suki in Divisoria Mall. They retail for at least Php250 in Greenhills. At Mega Macao, they retail for Php20 and the maker told me that if I get them by the hundreds or thousands, I could easily get them for an embarrasingly low price. Whoa Nelly! I will go back to my suki and demand a rebate. Hahahahaha

The MIF by and large offer international trade and investment cooperation opportunities. The exhibitors didn't just sell their products, they looked for business partners. There were seminars on investing in China, Angola, Macao, India, Poland and others. There were also technical seminars on ethanol, methanol, casino security, photography and others. There were vendors of real estate properties all over the world. My favorite were the wine and olive oil tasting from Portugal, Chile, Australia and others. By the time I got out of the Exhibition Hall for lunch, I was merrily prepped for another round of wine tasting at the Venetian Italian Festival. Thank goodness for flat shoes that made walking tipsy a lot easier.

Next column, I shall share with you what I learned from the Forum on Critical Issues in Sourcing from China: Product Safety & Quality. The side stories of the speaker are more intriguing!

My best memory of Macau is eating, by the sidewalk, Shabu-shabu bought from a carinderia in a hole in the wall at San Malo. Yummy! Their number one local delicacy is almond cake laced with sesame seeds or pork fat. It is actually prettily packaged uraro.


Tuesday, October 16, 2007

Learn from your own employees

What happens when your best employees leave your company? Or they might not leave at all, but you make them just stay there and eventually "figuratively die" there.

When these things happen, you are not managing your organizational learning and you are losing out on knowledge and ideas that might have helped your business in a big way.

Organizations do not learn, individual employees learn. Your organization now needs to capture, evaluate relevance to your corporate ideology and goals, disseminate to all employees who could use them, get feedback on how they applied the knowledge, capture, distill, and so on and so forth.

This is the gist of my paper on "Aligning Organizational and Personal Learning for Excellent Business Results" which I delivered at the enormously successful Summit on Globalization of HR in Taipei last month.

What usually happens in most companies is that knowledge is shared only with an elite group, a.k.a. management team or your own working unit. For example, every year this company holds an Economic Briefing by a well-respected economist in the country. After the briefing, it is business as usual for the attendees as if the briefing never happened. Or they talk about the economic forecasts among themselves and in whispers even. No cascade of learning down to those who need and who could use the knowledge.

Or you send your management and staff to seminars, conferences and workshops and all you require them to do when they are back is to liquidate financial obligations. Or somebody comes up with a bright idea, and everybody else gangs up on the idea and the bearer of the idea with a mission to kill or simply ignore the idea. Or management simply gives idea creators the usual pat in the back then back to normal.

The Malcolm Baldrige Criteria for Business Excellence defines learning as a learning that is directed not only toward better products and services, but also toward being more responsive, adaptive, innovative, and efficient—giving your organization marketplace sustainability and performance advantages and giving your workforce satisfaction and the motivation to excel.

Actually learning is embedded in the way any organization operates. They are regular part of daily work; practiced at personal, work, unit and organizational levels; results in problem solving at their source (root cause); focused on building and sharing knowledge throughout the organization; and driven by opportunities to effect significant, meaningful change.

Organizational learning results in enhanced values for customers; new business opportunities; reduced errors, defects, waste and related costs; increased productivity and effectiveness; and enhanced organizational performance in fulfilling its societal responsibilities and its service to the community. It comes from mostly from employees' ideas and also from research and development, customers input, best practices sharing and benchmarking.

Management guru Peter Senge defines organizational learning as the continuous testing of experience, and the transformation of that experience into knowledge—accessible to the whole organization, and relevant to its core.

It becomes imperative, therefore, to extract, capture, manage and use knowledge and ideas from employees. This gave rise to what businesses call knowledge management. It is kind of technical and verbose to be described here.

From my own experience, there are five ways to access implicit knowledge or knowledge that reside in the mind and heart of an employee. This is vicarious learning done through straight talk (written and oral presentations), storytelling, digital (blogs, emails, pictures), crucial conversations (gossips and grapevine) and structured conversations (world café, focus groups, meetings).

I remember this story: I've always been handy at fix-it jobs around the house and I've tried to train my children to follow suit. Recently I asked one of my sons to hold the flashlight while I replaced a faulty electrical switch. Only mildly interested, my son asked me after a short pause. 'How did you learn to do this stuff?' I replied, "By holding the flashlight."

URBAN SPA cordially invites you all to their 5th anniversary celebration tomorrow, Oct 21, 1-3pm, at the 5th Level Wellness Zone, Shangri-la Plaza. There will be a photo gallery exhibit of cool breastfeeding moms (Tessa Valdez, Sandy Romualdez, Tintin Bersola, and others) until Oct 31 and Bench Kids & Blissful Babes fashion show.


Thursday, October 11, 2007

All are potential or virtual global citizens

It seems like our own Overseas Filipino Workers are not the only globally mobile people in the world. Talents from all over are going around to work and live in countries other than their own.

Maury Peiperl, professor of Leadership and Strategic Change, IMD International, gave a very insightful look into global mobility at the Summit for Globalization of HR in Taipei last month.

Prof. Peiperl defined global mobility as the actual and the potential movement of individuals across countries especially regions of the world the world. Movement may be initiated by individuals or organizations and may or may not have a job-related component. He says that people move because they are told to move by their company or other agents; asked to move by employer, potential employer or significant others; perceives specific opportunity or driven to move on own reasons such as economics, political necessity, adventure, cultural interests, learn or develop new skills, develop a strong curriculum vitae and to get away from something or someone.

From his research, this author of Managing Change, Career Frontiers, Career Creativity and The Handbook of Career Studies has identified the following patterns of global mobility:

· Cross-national movement of labor continues to increase yearly, having doubled in the last 30 years.

· Still, growth in labor mobility significantly lags the growth in cross-national flow of goods and services.

· In some developing countries, the growing local supply of certain skills is reducing mobility needs.

· In others, "surplus" labor is being regularly exported to other countries; such "source" countries have sometimes included Taiwan and certainly include the Philippines, Pakistan, and Turkey, to name a few.

Prof Peiperl emphasized that there is no single entity that can be called global executive. Global executives are those who do global work and global work is found in the intersection of business complexity and cultural complexity.

He observed that expatriates sent from headquarters to foreign locations (or "inpatriates", vice versa), to provide needed skills and/or to form tighter international links, especially with headquarters (whether or not they have global skills). He added that the Japanese executives around the world outnumber all other nationals.

I agree with that because when a Japanese company partners with a local company here, for example, it is stipulated in the joint venture agreement that a number of people from the Japanese partner be involved in the business to protect their interests. So even those Japanese technicians are hired at least at the managerial level and receive the expatriate packages.

He also classified global activities and global citizens as: virtual global citizens (spend a great deal of interaction across cultures and markets while staying in home country); real global citizens (spend a great deal of interaction across cultures and markets and a great deal of time away from home culture and market); global travelers (spend a great deal of time away from home culture and market); potential global citizens (does not interaction with other cultures and markets and spends time at home).

From this classification, we can say that everybody is, indeed, a potential global citizen (dreaming and, maybe preparing, to work abroad) and a virtual global citizen (our colonial mentality sustains this).

Prof Peiperl suggests that the foundation to become real global citizens is global knowledge such as: know who or social capital/relationships; know how or skills and knowledge about work; know why or identification with strategy and culture; and know what or understanding of specifics and facts. He stressed that knowledge is a resource, not a competence. It is essential to all other competencies but not sufficient to any of them. The other global career capital are: cultural breadth, language skills, interpersonal skills, cognitive complexity, cosmopolitanism, systems skills, network and global track record.

More importantly, he accentuated the threshold traits for being global: Integrity, required for respect over the long haul; humility, fundamental to learning from others; inquisitiveness, essential to seeking out and learning from new experience; and hardiness, necessary for the above, and for rising to the unique challenges of global work.

Prof Peiperl speaks from his own experience. He has taught, researched, or consulted in twenty-five countries on four continents and is dedicated to promoting the role of business in sustainable global development and in the resolution of cross-national conflict.


Thursday, October 4, 2007

Leading for performance requires courage

The Summit for Globalization of HR in Taipei last week was a huge success. One of the memorable keynote talks was from Joan Magretta, author and editor of Harvard Business Review books. Her latest book is What Management Is: How It Works and Why It's Everyone's Business.

Her strong message is that the purpose of business is the creation of value. Enterprises that fixate on their own bottom line will miss the path to long-run success. No value, no customers, no bottom line, no business.

She went on to outline how organizational leaders lead for performance.

First, define your business models: how do you create value? She says that value is defined by customers, one person at a time. Value takes many forms and comes from many sources—from a product's usefulness, its quality, the image associated with it, its availability and the service that comes with it—making value intangible. Value created, therefore, is the maximum a customer is willing to pay less the cost to produce. The acid test of a business model is that the psychology makes sense and the numbers add up. Everybody wins.

She gave the example of Ikea's unique value to customers: low price (customers are willing to do some of the work, e.g. assembling; Ikea style (Ikea control the design process and buy in large quantities); and instant gratification (customers can bring home goods immediately)

Second, identify your strategy: how do you capture some of the value you create? Your strategy should be towards doing better by being different. There are different choices in which customers and markets to serve; which products and services to offer; what kind of value to create. Also how to tailor value chain that supports those choices resulting in higher prices and/or lower costs.

Some of Ikea's strategy includes: food and childcare that encourage long visits; displays that help more impulse buying, stores promote heavy traffic and self-service, sourcing from long-term suppliers, use of in-house design, use of flat packaging, suburban locations and provision of ample parking.

Ms. Magretta adds that tradeoffs are critical to strategy and to performance. Some of Ikea's tradeoffs are: no sales help in the store, no delivery, no high cost materials, no assembly, no to many furniture styles, yes to in-store meals, yes to in-store childcare and yes to big-store format.

Third, design the organization: where to draw the lines. The design of the organization must be aligned with the strategy. There is no "right way" for all companies to organize. The key strategic dimensions are scale, scope and structure.

Fourth, keep score: what should you measure? Good metrics capture performance drivers and make success visible. It is therefore vitally important to know what to measure, though they are hard to find. Was it profit per car or number of cars sold for Henry Ford? Is it gross margin or return on invested capital for Dell Inc?

Fifth, decide on values: which ones matter and why? Ms. Magretta says that ethical values—trust, integrity—are essential for all organizations. When culture is aligned with strategy, company-specific values provide the context that allows people to manage themselves in ways that contribute powerfully to performance. Inauthentic or misaligned cultures erode performance just as powerfully.

Southwest Airlines' value proposition to its customers comprise of no-frills, reliable service, frequent departures and low price. In choosing these values, they made strategic tradeoffs such as no long flights, no major, congested airports, no seat assignments, no baggage transfer, no connection with other airlines, no plans other than 737s, no meals and no ticket agents.

Finally to lead for performance, Ms. Magretta quotes Confucius: "To see what is right, and not to do it, is want of courage or of principle." Earlier she quoted Terry Gou (Han Hai Precision Industries): "The important thing in any organization is leadership, not management. A leader must have the decisive courage to b e a dictator for the common good."