Electronic Arts plans to cut its workforce by 17% as it tries to align its business with a transforming video game industry.
The company announced the lay-offs of 1,500 people just hours after it said it would pay at least $275 million to buy Playfish Inc, a maker of social online games popular on Facebook, MySpace and the iPhone. The lay-offs are expected to save about $100 million a year.
"We are focusing on what works and what matters," chief financial officer Eric Brown said in an interview.
Digital content makes up about 12%of EA's revenue. But it's growing, while industry sales from packaged video games are on the decline.
The cuts are in addition to the 1,100 jobs the company already slashed this year as part of a restructuring plan to shift focus to hit games.
On Monday, EA posted a net loss of $391 million, or $1.21 a share, in the fiscal second quarter, wider than the loss of $310 million, or 97 cents per share, a year earlier.
The company behind games such as "Madden NFL 10" and "The Beatles:Rock Band" reported net sales of $788 million in the July-September period,down 12% from the same time a year earlier.
These results only paint a partial picture of how EA performed during the quarter. When counting deferred revenue from packaged games with online components and games that are completely digital, EA reported adjusted earnings of $19 million, or 6 cents per share. That is up from an adjusted loss of $20 million a year earlier, and it compares with average analyst estimates of 7 cents per share.
With the acquisition of the two-yearold start-up, Playfish, EA is diving further into the lucrative world of social online games, which tens of millions of people play on Facebook, MySpace, the iPhone and other platforms.
Broadpoint Amtech analyst Ben Schachter said games on social networks "are a dynamic space, and the deal suggests EA sees a big potential for this market."
Thursday, November 12, 2009
Magnificent seven
In the most important, most revered event since the invention of the brontosaurus trap,Microsoft shipped the most incredibly fabulous operating system ever made; the release of Windows 7 also spurred a new generation of personal computers of all sizes at prices well below last month's offers.The top reason Windows 7 does not suck: There is no registered website called Windows7Sucks.com
Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.
Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.
Wednesday, October 14, 2009
SMART PEOPLE LEADING SMARTER PEOPLE
We live in the midst of the worse financial crisis in more than 50 years, and take heart in the decline of oil prices as a sign of the easing of yet another crisis - the "energy crisis". Yet, at a time when new ideas are the only hope for our economic salvation, the real "energy" crisis is to be found in the inability of tired old institutions to produce the innovation and creativity that we so desperately need.
In fact, today's real energy crisis is represented by our inability to rise to the occasion with new insights and approaches. Despite the enormous pool of talented people that have characterised almost two decades of globalisation, most of these individuals and their ideas continue to be ensnared in organisational cages left over from periods of capital- and labour-intensiveness, designed for command and control, rather than liberation and excellence. The result: great people achieving mediocre results. What an extraordinary waste!
While the word "talent" is bandied about as if it were an undifferentiated resource, I believe, instead, that all talent issues begin with the individual. We must, therefore, consider the organisational consequences of restoring a degree of individuality to the talent issue. In my recent research on virtuoso teams, we reaffirmed the old adage that real success - and a better world - is more easily achieved by surrounding yourself with people smarter than you and, then, letting them show it. This means accepting a challenging team environment and adopting new leadership practices better suited to an impresario than to a manager. While such a suggestion may seem fanciful, the seriousness of our present situation suggests that such flights of fancy might well be a small price to pay for helping talent contribute to a better world.
I begin with the belief that real professional talent is precious and should be devoted to living up to its promise, in the pursuit of higher-order societal goals. Leader-aspirants should strive to fulfil this objective, and our work in the virtuoso-team project examined how this could be done.
Smart people leading smarter people
Our research focused on a number of great teams that were defined by big, ambitious, personally-risky goals and a relentless search for the absolute best talent, two things that gave them a head-start on "greatness". They then applied leadership approaches that allowed their assembled talent to shine as brightly as the leader had anticipated. Among the leadership practices we observed were:
Leader as a talent scout
All of the teams we studied featured a leader who devoted substantial time and energy to identifying potential talent. J Robert Oppenheimer scoured US campuses for the right scientific skills to bring together the Manhattan Project, which led to the atomic bomb and pioneered "big science". Miles Davis was always on the lookout for the next "big sound; the next new idea".
We were amazed by the amount of time team leaders personally devoted to getting the best people obtainable, position by position. In every case, being a "talent scout" was always a central piece of the leadership role.
Listening rather than telling
If you assemble all-stars in every position, and pay the premium for doing so, then listening should be a leader's most important activity. We saw this in all our teams. Davis, who revolutionised jazz with different all-star bands in the 1940s, 1950s and 1960s, was characterised as a world-class listener, despite his reputation for opinionated assertiveness. Only by listening can a team leader understand and appreciate the potential contributions of talented individuals.
Focus on collaboration and an exchange of ideas, rather than idea-hoarding
Ideas have value only if they're shared. All of our teams succeeded because they shared rather than protected ideas. This does not mean that there was no competition within the teams; far from it. Thomas Edison, who, as the "Wizard of Menlo Park", was credited with inventing incandescent light, recording sound and adding sound to motion pictures, in reality did it with a team - The Muckers - and built his "invention factory", so that ideas between developers and machinists could move rapidly in both directions.
In nearly all of our teams, small, cramped quarters promoted intensity, immediacy and full-bandwidth team conversations, ensuring keen awareness among all team members.
"Fail faster to succeed sooner"
When facing big risks, taking small ones frequently allows a team to move faster and with a lesser chance of catastrophic failure. The use of "prototypes" is a different way of learning, and all of our teams used experimentation and failure to achieve rapid learning.
For example, take Leonard Bernstein and his all-star team who created a Broadway revolution with the "West Side Story" project. Dances were deliberately fashioned out of continuously changing modules in order to respond faster to audience reactions.
Challenge ideas, not the person
Virtuoso teams thrive on direct and impolite challenges to ideas, without diminishing the individuals. While each all-star team member's potential is accepted as a given, every idea or action is fair game for improvement to the team's benefit. Such tolerance for challenge profoundly changes team dynamics and makes the leadership role much more involving, but the results are worth it. Comic genius Sid Caesar and his virtuoso writing team, which included Woody Allen and Mel Brooks, were challenged to create a new show every week. They wanted every show to be memorable, and their slogan became: Polite teams yield polite results!
Let individuals soar
Perhaps in our efforts to be inclusive, we've allowed the "we's" to so dominate the "I's" that we've wound up "just average". If you go to the trouble and expense of finding and recruiting great people, let them be great. Don't bend them to fit the team. General Leslie Groves, who helped the Manhattan Project succeed, adopted the leadership attitude of always asking: "What can I do to make it easier for you to do your job?" Our idea is to put talented individuals in positions where they can be as good as their promise, and then help them to succeed, for all of our benefits.
We believe that one of the best ways of employing leadership for a better world lies within the ability of talented people to fulfil their ambitions in the pursuit of team, organisational or societal goals. This is not easy to do, and seems to defy currently fashionable, and overwhelmingly negative attitudes towards ambition, elitism and "stardom". Quite the contrary, we are in favour of all of these: being ambitious, allowing justifiable elites to emerge on the basis of superior performance and letting people become stars. We believe that organisations that win in the talent wars do it one individual at a time, and by enabling talented people to fulfil their potential, we increase the likelihood that we all will win.
William Fischer is a professor of technology management at leading business school IMD International in Lausanne, Switzerland. He addresses this topic in 'Driving Strategic Innovation', a programme he co-directs with Prof Charlie Fine of the Massachusetts Institute of Technology.
In fact, today's real energy crisis is represented by our inability to rise to the occasion with new insights and approaches. Despite the enormous pool of talented people that have characterised almost two decades of globalisation, most of these individuals and their ideas continue to be ensnared in organisational cages left over from periods of capital- and labour-intensiveness, designed for command and control, rather than liberation and excellence. The result: great people achieving mediocre results. What an extraordinary waste!
While the word "talent" is bandied about as if it were an undifferentiated resource, I believe, instead, that all talent issues begin with the individual. We must, therefore, consider the organisational consequences of restoring a degree of individuality to the talent issue. In my recent research on virtuoso teams, we reaffirmed the old adage that real success - and a better world - is more easily achieved by surrounding yourself with people smarter than you and, then, letting them show it. This means accepting a challenging team environment and adopting new leadership practices better suited to an impresario than to a manager. While such a suggestion may seem fanciful, the seriousness of our present situation suggests that such flights of fancy might well be a small price to pay for helping talent contribute to a better world.
I begin with the belief that real professional talent is precious and should be devoted to living up to its promise, in the pursuit of higher-order societal goals. Leader-aspirants should strive to fulfil this objective, and our work in the virtuoso-team project examined how this could be done.
Smart people leading smarter people
Our research focused on a number of great teams that were defined by big, ambitious, personally-risky goals and a relentless search for the absolute best talent, two things that gave them a head-start on "greatness". They then applied leadership approaches that allowed their assembled talent to shine as brightly as the leader had anticipated. Among the leadership practices we observed were:
Leader as a talent scout
All of the teams we studied featured a leader who devoted substantial time and energy to identifying potential talent. J Robert Oppenheimer scoured US campuses for the right scientific skills to bring together the Manhattan Project, which led to the atomic bomb and pioneered "big science". Miles Davis was always on the lookout for the next "big sound; the next new idea".
We were amazed by the amount of time team leaders personally devoted to getting the best people obtainable, position by position. In every case, being a "talent scout" was always a central piece of the leadership role.
Listening rather than telling
If you assemble all-stars in every position, and pay the premium for doing so, then listening should be a leader's most important activity. We saw this in all our teams. Davis, who revolutionised jazz with different all-star bands in the 1940s, 1950s and 1960s, was characterised as a world-class listener, despite his reputation for opinionated assertiveness. Only by listening can a team leader understand and appreciate the potential contributions of talented individuals.
Focus on collaboration and an exchange of ideas, rather than idea-hoarding
Ideas have value only if they're shared. All of our teams succeeded because they shared rather than protected ideas. This does not mean that there was no competition within the teams; far from it. Thomas Edison, who, as the "Wizard of Menlo Park", was credited with inventing incandescent light, recording sound and adding sound to motion pictures, in reality did it with a team - The Muckers - and built his "invention factory", so that ideas between developers and machinists could move rapidly in both directions.
In nearly all of our teams, small, cramped quarters promoted intensity, immediacy and full-bandwidth team conversations, ensuring keen awareness among all team members.
"Fail faster to succeed sooner"
When facing big risks, taking small ones frequently allows a team to move faster and with a lesser chance of catastrophic failure. The use of "prototypes" is a different way of learning, and all of our teams used experimentation and failure to achieve rapid learning.
For example, take Leonard Bernstein and his all-star team who created a Broadway revolution with the "West Side Story" project. Dances were deliberately fashioned out of continuously changing modules in order to respond faster to audience reactions.
Challenge ideas, not the person
Virtuoso teams thrive on direct and impolite challenges to ideas, without diminishing the individuals. While each all-star team member's potential is accepted as a given, every idea or action is fair game for improvement to the team's benefit. Such tolerance for challenge profoundly changes team dynamics and makes the leadership role much more involving, but the results are worth it. Comic genius Sid Caesar and his virtuoso writing team, which included Woody Allen and Mel Brooks, were challenged to create a new show every week. They wanted every show to be memorable, and their slogan became: Polite teams yield polite results!
Let individuals soar
Perhaps in our efforts to be inclusive, we've allowed the "we's" to so dominate the "I's" that we've wound up "just average". If you go to the trouble and expense of finding and recruiting great people, let them be great. Don't bend them to fit the team. General Leslie Groves, who helped the Manhattan Project succeed, adopted the leadership attitude of always asking: "What can I do to make it easier for you to do your job?" Our idea is to put talented individuals in positions where they can be as good as their promise, and then help them to succeed, for all of our benefits.
We believe that one of the best ways of employing leadership for a better world lies within the ability of talented people to fulfil their ambitions in the pursuit of team, organisational or societal goals. This is not easy to do, and seems to defy currently fashionable, and overwhelmingly negative attitudes towards ambition, elitism and "stardom". Quite the contrary, we are in favour of all of these: being ambitious, allowing justifiable elites to emerge on the basis of superior performance and letting people become stars. We believe that organisations that win in the talent wars do it one individual at a time, and by enabling talented people to fulfil their potential, we increase the likelihood that we all will win.
William Fischer is a professor of technology management at leading business school IMD International in Lausanne, Switzerland. He addresses this topic in 'Driving Strategic Innovation', a programme he co-directs with Prof Charlie Fine of the Massachusetts Institute of Technology.
Monday, October 12, 2009
China's factories scramble to hire migrant workers
Chinese factories are racing to hire migrant workers laid off during the global crisis as they struggle to meet the world's Christmas orders for Barbie dolls, iPods and designer jeans, say analysts and observers.
The surge in demand has caused a labour shortage in some parts of the country as factories ramp up production,but does not necessarily mean that the export sector is on the mend, they said.
"The shortage is primarily due to a short-term misalignment of demand and supply due to a sudden upswing in demand probably fuelled by the arrival of Christmas orders," said economist Ren Xianfang of IHS Global Insight in Beijing.
"The high labour intensity of most of the export-oriented manufacturing industries means that either the reduction or increase of new orders will cause quite big swings in labour demand, which explains the sudden job losses and just as sudden resurgence of demand."
Nearly 20 million migrant workers lost their jobs early this year as factories closed or slashed production in response to plummeting orders from key markets in Europe and the United States.
While the government says 96% of those people have found new jobs in the cities, the still-weak export sector suggests many of them have gone into construction or stayed home where economic conditions are improving thanks to massive government spending.
"The country's interior provinces have benefited from fiscal stimulus projects and stronger local economies," said Ben Simpfendorfer, a Hong Kong-based economist at Royal Bank of Scotland.
"The logic for travelling thousands of kilometres to a neighbouring province is thus less compelling."
In southern Guangdong province, the country's manufacturing hub, factories face a "serious" labour shortage as Christmas orders pour in, said Xu Jiang, a manager at the Hui'an Human Resources Service Centre in Dongguan city.
"Demand for workers is rising but many migrant workers did not come back from home (after being laid off),"Xu said."Some simply will not come back here after finding a job at home."
Many migrant workers were choosing to stay home to take advantage of improved conditions created by the government's four-trillion-yuan ($585 billion) stimulus package, Xu said.
The shortage has forced factories in Wenzhou, in eastern Zhejiang province,to offer free meals, air-conditioned dormitories and extra holidays to entice migrant staff, state media reported.
Wang Ouxiang, deputy secretary of the Employment Service Centre in Wenzhou, said there were 150,000 job vacancies in the city."Factories in the city are thirsty for labourers."
Pressure on factory owners was more intense this year. Foreign retailers had delayed placing Christmas orders until September due to the uncertain economic outlook and were demanding shorter delivery times to keep inventory levels low, said Mr Simpfendorfer.
"Orders have been bunched into a single month - they usually start coming in as early as July," he said."The labour shortages are not necessarily a sign of a fast-recovering export sector, and while export orders have strengthened, they may yet relapse."
The surge in demand has caused a labour shortage in some parts of the country as factories ramp up production,but does not necessarily mean that the export sector is on the mend, they said.
"The shortage is primarily due to a short-term misalignment of demand and supply due to a sudden upswing in demand probably fuelled by the arrival of Christmas orders," said economist Ren Xianfang of IHS Global Insight in Beijing.
"The high labour intensity of most of the export-oriented manufacturing industries means that either the reduction or increase of new orders will cause quite big swings in labour demand, which explains the sudden job losses and just as sudden resurgence of demand."
Nearly 20 million migrant workers lost their jobs early this year as factories closed or slashed production in response to plummeting orders from key markets in Europe and the United States.
While the government says 96% of those people have found new jobs in the cities, the still-weak export sector suggests many of them have gone into construction or stayed home where economic conditions are improving thanks to massive government spending.
"The country's interior provinces have benefited from fiscal stimulus projects and stronger local economies," said Ben Simpfendorfer, a Hong Kong-based economist at Royal Bank of Scotland.
"The logic for travelling thousands of kilometres to a neighbouring province is thus less compelling."
In southern Guangdong province, the country's manufacturing hub, factories face a "serious" labour shortage as Christmas orders pour in, said Xu Jiang, a manager at the Hui'an Human Resources Service Centre in Dongguan city.
"Demand for workers is rising but many migrant workers did not come back from home (after being laid off),"Xu said."Some simply will not come back here after finding a job at home."
Many migrant workers were choosing to stay home to take advantage of improved conditions created by the government's four-trillion-yuan ($585 billion) stimulus package, Xu said.
The shortage has forced factories in Wenzhou, in eastern Zhejiang province,to offer free meals, air-conditioned dormitories and extra holidays to entice migrant staff, state media reported.
Wang Ouxiang, deputy secretary of the Employment Service Centre in Wenzhou, said there were 150,000 job vacancies in the city."Factories in the city are thirsty for labourers."
Pressure on factory owners was more intense this year. Foreign retailers had delayed placing Christmas orders until September due to the uncertain economic outlook and were demanding shorter delivery times to keep inventory levels low, said Mr Simpfendorfer.
"Orders have been bunched into a single month - they usually start coming in as early as July," he said."The labour shortages are not necessarily a sign of a fast-recovering export sector, and while export orders have strengthened, they may yet relapse."
Sunday, October 11, 2009
IT'S CHEAPER TO KEEP A GOOD EMPLOYEE
David Bell, MD of Ra-Kahng Associates, says companies should be more selective when making job cuts By Nina Suebsukcharoen
Being a high performer is not always a sure ticket to career success because when the going gets tough, as it has been lately,the best people are often shown the door along with others who don't meet their high standards, says David Bell, managing director of Ra-Kahng Associates, the Thailand licensee for the Crestcom International management training company.
This interesting point surfaced in a survey of local companies undertaken by a large finance firm, which could not be identified for business confidentiality reasons. Most of the participating companies said that when redundancies were undertaken they cut right across the board without taking individual performance into consideration.
Mr Bell questions this approach, saying it would be better to keep the high performers and motivate them.
"It is difficult to do that, and there are legal restrictions of course, but I would have thought there should be more effort to identify the high performers," he said, adding that in most most companies a small number of people account for a disproportionate amount of productivity.
He drew attention to Pareto's Principle the 80-20 rule - a formula developed by the Italian economist Vilfredo Pareto which states that in most companies 80% of the work is done by 20% of the people. The split could vary a little, say 70-30 or 60-40, but it is the high performers who make a huge difference in overall profitability. A large number of companies are hamstrung by having numerous workers who just come in to do the job they are paid for without trying to shine or improve in any way.
Mr Bell says it is important to find and develop talented employees, because this is the way to get out of the recession and build up business again.
The tendency to make across-the-board job cuts is common in other countries as well, but Mr Bell has noticed that in some countries there is more effort to retain high achievers. However, it seems the legal structure in Thailand and many other places tends to promote equal, across-the-board redundancies.
Pointing out that companies have to pay a set amount of money in severance pay depending on the number of years those laid off have put in, regardless of their performance, Mr Bell said he would rather pay more and keep the good people to ensure a better future for the company.
He said employers had to watch out for cases of "why did you fire me and not them?"and being able to defend their decisions, but making the effort to be more selective is still important.
Another key point that emerged in the survey is that companies should come out of this recession leaner and more effective than before and would not want to go back to a situation where they had to carry unproductive staff. This means that even when they start rehiring they probably won't employ as many people as before.
However, Mr Bell said he has heard that a lot of employees do not want to be rehired,with this applying particularly to factory workers who have gone back upcountry after getting their redundancy payment and are happy there.
This does affect local industries because some of them are seeing production increase faster than was earlier anticipated.
"Apparently that is happening quite a lot - you lay them off, pay them off and they don't want to come back again and you are stuck with having less people than before."
Recruiting people could also be problematic at the upper end of the market because some of those who were laid off feel they were treated poorly and do not want to return.
"I think they also recognise that they are more valuable," said Mr Bell.
He added that keeping high-potential employees does not hinge just on financial incentives such as salary, time off, gifts and bonuses, because these only have a shortterm effect.
"For example, give me a salary increase and I'll say that's great. Ask about my salary increase next week and I'll say it's what I'm worth. That is what they pay me, that is my value.
"It doesn't give me an incentive any more.Short term, for the first week or two, it does,but now I am settled down and that's it."
He said it is in fact long-term motivators that will make workers want to do a better job, and among these are recognition, particularly public recognition, a sense of belonging and a feeling of being "in on things",making a difference, doing an important job,being respected and being involved in problem solving."People are different and they have different levels of performance. You know, a machine is a machine. It uses a certain amount of power, needs to be serviced once a month or whatever, raw materials are pumped into it and of course it pumps out the stuff it produces at a certain rate. It can't go any faster than that - that is what the limit of the machine is.
"But a person doesn't have such limits, so you can motivate them by making them feel that they are doing a great job. Sure they have to be paid properly, but making them feel that they are part of the organisation and that they are doing something that is worthwhile is going to make them much more motivated."
Mr Bell said the biggest hidden cost of a company is in fact staff turnover, because this expense does not appear in the bottom line. This point emerged in a system worked out by the Saratoga Institute which was adopted by the Society for Human Resource Management.
Mr Bell and one of his associates put a lot of work into this issue, and determined that the average cost of replacing somebody works out to be about 30-40% of their annual salary.
This takes into account the time and money spent on advertising and hiring a replacement,and even after the new employee comes in it could take three to six months before the employee becomes productive because it would take that long to learn the job and get to know the company and its people.
"Of course, you could say that you saved money because you weren't paying anybody a salary during the period before hiring, but is this really a saving or a cost? I think it's a cost.
"If that job is a worthwhile job it has to have value to it on top of the salary, otherwise you wouldn't hire someone to do it."
Mr Bell also mentioned the outcome of a study done recently in seven European countries which found that more than 70%of executives who quit their companies did so to get away from their bosses.
Being a high performer is not always a sure ticket to career success because when the going gets tough, as it has been lately,the best people are often shown the door along with others who don't meet their high standards, says David Bell, managing director of Ra-Kahng Associates, the Thailand licensee for the Crestcom International management training company.
This interesting point surfaced in a survey of local companies undertaken by a large finance firm, which could not be identified for business confidentiality reasons. Most of the participating companies said that when redundancies were undertaken they cut right across the board without taking individual performance into consideration.
Mr Bell questions this approach, saying it would be better to keep the high performers and motivate them.
"It is difficult to do that, and there are legal restrictions of course, but I would have thought there should be more effort to identify the high performers," he said, adding that in most most companies a small number of people account for a disproportionate amount of productivity.
He drew attention to Pareto's Principle the 80-20 rule - a formula developed by the Italian economist Vilfredo Pareto which states that in most companies 80% of the work is done by 20% of the people. The split could vary a little, say 70-30 or 60-40, but it is the high performers who make a huge difference in overall profitability. A large number of companies are hamstrung by having numerous workers who just come in to do the job they are paid for without trying to shine or improve in any way.
Mr Bell says it is important to find and develop talented employees, because this is the way to get out of the recession and build up business again.
The tendency to make across-the-board job cuts is common in other countries as well, but Mr Bell has noticed that in some countries there is more effort to retain high achievers. However, it seems the legal structure in Thailand and many other places tends to promote equal, across-the-board redundancies.
Pointing out that companies have to pay a set amount of money in severance pay depending on the number of years those laid off have put in, regardless of their performance, Mr Bell said he would rather pay more and keep the good people to ensure a better future for the company.
He said employers had to watch out for cases of "why did you fire me and not them?"and being able to defend their decisions, but making the effort to be more selective is still important.
Another key point that emerged in the survey is that companies should come out of this recession leaner and more effective than before and would not want to go back to a situation where they had to carry unproductive staff. This means that even when they start rehiring they probably won't employ as many people as before.
However, Mr Bell said he has heard that a lot of employees do not want to be rehired,with this applying particularly to factory workers who have gone back upcountry after getting their redundancy payment and are happy there.
This does affect local industries because some of them are seeing production increase faster than was earlier anticipated.
"Apparently that is happening quite a lot - you lay them off, pay them off and they don't want to come back again and you are stuck with having less people than before."
Recruiting people could also be problematic at the upper end of the market because some of those who were laid off feel they were treated poorly and do not want to return.
"I think they also recognise that they are more valuable," said Mr Bell.
He added that keeping high-potential employees does not hinge just on financial incentives such as salary, time off, gifts and bonuses, because these only have a shortterm effect.
"For example, give me a salary increase and I'll say that's great. Ask about my salary increase next week and I'll say it's what I'm worth. That is what they pay me, that is my value.
"It doesn't give me an incentive any more.Short term, for the first week or two, it does,but now I am settled down and that's it."
He said it is in fact long-term motivators that will make workers want to do a better job, and among these are recognition, particularly public recognition, a sense of belonging and a feeling of being "in on things",making a difference, doing an important job,being respected and being involved in problem solving."People are different and they have different levels of performance. You know, a machine is a machine. It uses a certain amount of power, needs to be serviced once a month or whatever, raw materials are pumped into it and of course it pumps out the stuff it produces at a certain rate. It can't go any faster than that - that is what the limit of the machine is.
"But a person doesn't have such limits, so you can motivate them by making them feel that they are doing a great job. Sure they have to be paid properly, but making them feel that they are part of the organisation and that they are doing something that is worthwhile is going to make them much more motivated."
Mr Bell said the biggest hidden cost of a company is in fact staff turnover, because this expense does not appear in the bottom line. This point emerged in a system worked out by the Saratoga Institute which was adopted by the Society for Human Resource Management.
Mr Bell and one of his associates put a lot of work into this issue, and determined that the average cost of replacing somebody works out to be about 30-40% of their annual salary.
This takes into account the time and money spent on advertising and hiring a replacement,and even after the new employee comes in it could take three to six months before the employee becomes productive because it would take that long to learn the job and get to know the company and its people.
"Of course, you could say that you saved money because you weren't paying anybody a salary during the period before hiring, but is this really a saving or a cost? I think it's a cost.
"If that job is a worthwhile job it has to have value to it on top of the salary, otherwise you wouldn't hire someone to do it."
Mr Bell also mentioned the outcome of a study done recently in seven European countries which found that more than 70%of executives who quit their companies did so to get away from their bosses.
Friday, October 9, 2009
AMMAR CALLS FOR CHANGES IN SOCIAL SECURITY BENEFITS
Economist Ammar Siamwalla yesterday called for a cancellation of unemployment insurance paid to those who quit their jobs.
At the 24th Asean Social Security Association Board Meeting (ASSA) yesterday, Ammar, from the Thailand Development Research Institute, also said that economy-stimulating measures - such as the Bt2,000 allowance to low-income workers or the elder persons' Bt500 per head per month allowance - should be temporary.
Thailand's unemployment figures remained unclear, he said. The people changing from the universal health scheme (Gold Card) to the Social Security Office's membership package on grounds that they had jobs were declining, he said. Whilst the number of those shifting back to the Gold Card scheme after losing their jobs unchanged because they were still entitled to SSO benefits for six months. Meanwhile, although many companies didn't downsize their workforces, many workers no longer worked overtime and thus earned less than before, he said.
Thailand now had insurance systems for all cases. But what must be reconsidered, Ammar said, was unemployment insurance, which pays money to all jobless persons including those laid-off and those who quit jobs on their own. Those who quit should not get this money, he said, because they did that voluntarily, they were small in number, and the money should be spent in other assistance to reduce the SSO fund's burden.
Declining to say if the cancellation proposed should be done, SSO secretary-general Pan Wannapinij said it could not be done right away because the SSO must observe the law requiring it to pay the jobless at 30 or 50 per cent of their salary. The change would have to be scrutinised by the SSO Board first and employee representatives might oppose it.
Last year, the SSO paid out Bt2.4 billion in unemployment insurance, while Bt3.9 billion was paid in such unemployment insurance in the past eight months, prompting an estimation that this year's figure could be Bt5 billion, he said.
Pan also talked about improving SSO benefits for "off-system" workers - those whose employers are not registered companies but who willingly applied for SSO membership according to the SSO Act's article 40. A proposed improvement should be submitted to the Council of State in two weeks, he said. After that it will be sent for Cabinet approval before being published in the Royal Gazette. He said the proposed draft also allowed the off-system workers, who are required to pay Bt3,360 distribution to the SSO fund per year, to pay at Bt280 a month.
At the 24th Asean Social Security Association Board Meeting (ASSA) yesterday, Ammar, from the Thailand Development Research Institute, also said that economy-stimulating measures - such as the Bt2,000 allowance to low-income workers or the elder persons' Bt500 per head per month allowance - should be temporary.
Thailand's unemployment figures remained unclear, he said. The people changing from the universal health scheme (Gold Card) to the Social Security Office's membership package on grounds that they had jobs were declining, he said. Whilst the number of those shifting back to the Gold Card scheme after losing their jobs unchanged because they were still entitled to SSO benefits for six months. Meanwhile, although many companies didn't downsize their workforces, many workers no longer worked overtime and thus earned less than before, he said.
Thailand now had insurance systems for all cases. But what must be reconsidered, Ammar said, was unemployment insurance, which pays money to all jobless persons including those laid-off and those who quit jobs on their own. Those who quit should not get this money, he said, because they did that voluntarily, they were small in number, and the money should be spent in other assistance to reduce the SSO fund's burden.
Declining to say if the cancellation proposed should be done, SSO secretary-general Pan Wannapinij said it could not be done right away because the SSO must observe the law requiring it to pay the jobless at 30 or 50 per cent of their salary. The change would have to be scrutinised by the SSO Board first and employee representatives might oppose it.
Last year, the SSO paid out Bt2.4 billion in unemployment insurance, while Bt3.9 billion was paid in such unemployment insurance in the past eight months, prompting an estimation that this year's figure could be Bt5 billion, he said.
Pan also talked about improving SSO benefits for "off-system" workers - those whose employers are not registered companies but who willingly applied for SSO membership according to the SSO Act's article 40. A proposed improvement should be submitted to the Council of State in two weeks, he said. After that it will be sent for Cabinet approval before being published in the Royal Gazette. He said the proposed draft also allowed the off-system workers, who are required to pay Bt3,360 distribution to the SSO fund per year, to pay at Bt280 a month.
Wednesday, September 23, 2009
AN ENTREPRENEUR OF ONE'S OWN LIFE
Po Chung, co-founder of DHL International Asia-Pacific, discusses his "entrepreneurial life journey" and describes the attributes of a successful entrepreneur, particularly during what he calls "the first 10 yards". The Nation's Pichaya Changsorn reports.
Even if you have never been a business manager, you are already the manager of your own life, says Po Chung, co-founder of DHL International Asia-Pacific, who now teaches entrepreneurship at the University of Hong Kong.
"Every one of us is the entrepreneur of our own life," he told a group of students on a recent visit to Bangkok. "Nobody has lived your life before; you're the first one. So, you can do anything. You can start-up. You can manage [a business to become] a good asset or you can be as poor as you can be, not only in a money sense but also in a spiritual sense."
Chung, who co-authored the book "The First 10 Yards: The Five Dynamics of Entrepreneurship", was lecturing to about 40 students from 13 European countries who took part in the Asian University's "Summer University" programme.
"Many people are very rich in money but very poor in spirit," he said.
"Since life is an entrepreneurial journey and you're the entrepreneur of your life, by understanding, designing, creating and managing your journey, you can control your future."
Giving his life as an example of an "entrepreneurial life-long journey", Chung said his early life was not so affluent because his father lost his businesses during the Communist "liberation war" and the family had to escape from China to Macau. He had to drop out of school and went fishing for two years because his father ran out of money when he was in the third grade.
Then life became better. Chung moved to Hong Kong and was eventually able to join a well-known boarding school, St Stephen's College, and later went to Hong Kong University. He was doing well until he overslept and missed a history examination. His father then sent him to study at the University of the Seven Seas, which was actually a ship that hosted teachers and students who had to sail around the world while studying.
However, Chung had to change his university again because his father wanted him to study science subjects, instead of history or geography. So he signed up for fisheries management at Humboldt State University in Arcata, California.
Chung said that although he never practised fisheries management one day in his life. He was able to apply the knowledge he gained to his life's work.
"I stole shamelessly everything I knew about fisheries and used it in my businesses. I was able to make the 'cross over', and I've been stealing even since: when I talk with people, I asked them questions, [get them] to tell their ideas, and I convert [these] into my businesses."
The courier business was not his first job after graduation. He worked for Topper Toys, a toy manufacturer which he found gave little attention to its workers because "everything she had to do, she could learn in 15 minutes. So, if she didn't come to work, they could easily find someone to replace her.
"In courier services, you can't do that because the courier drives the truck and he's out for three hours. [And while he's out] he can decide either to smile or not to smile. It's not like in McDonald's, [where] everything is under one roof. If a staff member doesn't smile, his supervisor can see he doesn't smile. But if [the courier] doesn't smile, nobody at our company knows.
"So we have to make sure the courier is happy in his life when he walks into a customer's reception area. He has to remember the name of the lady at the reception desk, and pretty soon they will remember his name.
"We paid attention not only to how they were dressed, but made sure they were dating - I had to attend a lot of weddings," Chung said, with a grin.
The opportunity to launch the courier service came after two and a half years with Topper Toys. Chung had been promoted to operations manager, with responsibility for logistics and supply chain management. The skills and knowledge he gained from the toy firm readied him for the moment when Adrian Dalsey, a co-founder of DHL, flew to Hong Kong to offer Topper Toys a cutting-edge delivery service.
After only a few meetings, Chung succeeded in persuading Dalsey to fly back to his US headquarters and convince his partners to award Chung the rights to run DHL's business across the Asia-Pacific region. Chung began his entrepreneurial journey with DHL with US$50,000, only two customers, a secretary, no car and basically nothing else.
During DHL's first 15 years, from 1969-84, the firm expanded into 125 countries - or a new country every five weeks, on average. One of its key success factors was picking the right kind of employees.
"There was one formula in picking our people: we were hiring the kind of people we were willing to follow, others were willing to follow; others were willing to partner with."
Chung said DHL "scanned for viruses on the candidate's personal operating systems" such as their beliefs, values, behaviour, likes, dislikes, integrity and character.
"Basically, [it's about] who are you. Can people trust you? Are you unkind, unfair, shameless, corrupt, rude, a liar, unwise, disloyal, cowardly, a repeater of mistakes, or unforgiving? "
There was also another lesson: getting the right name is very important. Unlike some of its competitors, Chung said, DHL had an initial advantage because its name was easy to pronounce in any language.
"That's why, when I picked the names for my children, I made sure people could see them and were able to read them. Yet they are not common names."
Chung said entrepreneurs had to have a basic quality which he called a "sleep factor".
"Many people think about risk factors, and I admit risk taking is important. But you also have to be able to 'silo' your problems, [leaving yourself the capacity] to go to sleep, even when you get caught," he said, citing his own experience during an initial stage when he was arrested by the police for infringing the Hong Kong Post Office's exclusive right to carry letters in and out of the colony. DHL successfully defended the case.
"There are two things that business school cannot teach an entrepreneur: the first is focus, or 'staying with a problem until it gets done', and the other is passion. An entrepreneur must have enough of these two qualities," he said.
"We have also found that most business schools teach marketing, but do not teach selling. If you're an entrepreneur and you don't know how to sell, it won't work out, because you won't have money or anything else."
Also, Chung advised, don't take an MBA course.
"If you want to become an entrepreneur, don't study for an MBA. Do it [become an entrepreneur] first and come back to take an executive MBA later, because MBA [studies] fill you with all kinds of junk. It's wrong timing - like teaching you to drive when you're 60," he said.
"Me, Inc": Looking at life as a business
People regard as "business" only that part of life that involves money. But, in reality, everything is business, Chung said.
"Your life is business and you're the entrepreneur. You're in the business of providing personal services to anyone around you. You're your most important customer and supplier."
Chung suggested that his students write a "business plan" for their lives, taking into account the needs of their "customers" and "suppliers", who can be anyone from parents to offspring, siblings, friends, business partners or bosses, and all of their "suppliers".
"Consider what they want. Is it moral support, physical help, mental help, social help, advice, companionship, just being there...?"
He said the students' business plans should include a marketing plan for managing their "personal brand", which took into account their "service quality", as well as their tangible and intangible assets.
"The management team is you and your 'tribe', and the returns are 'psychic income' and 'emotional profit', he said.
Chung also urged students to give and take, while staying away from "net takers".
Ten pieces of advice, in hindsight
In concluding his lecture, Chung looked back on his years as an entrepreneur to offer 10 pieces of advice, in hindsight:
1. Spend time with your loved ones before they go away.
2. Follow my life's secret formula: understand, design, create and manage. Then you will control your future.
3. If you want to be an entrepreneur, don't get an MBA - get an EMBA.
4. Don't be in a hurry to get married, to either a spouse or a company. Ninety per cent of your misery or happiness will come from one person, so you want to know more about people in general before you select the one with whom you will spend the rest of your life.
5. Set up a life-long learning programme.
6. A bad break is not the end of the world.
7. Hustle while you wait: luck is when opportunity meets preparedness.
8. Leadership is about trust. Everything else comes second. People will follow you only if they know you will not hurt them.
9. If you don't want people to know about it, don't do it. Live by the golden rule: "don't lie, don't cheat, don't steal."
10. Live off your parents for as long as you can. Buy a house as a multigenerational effort. Property prices will continue to go up. You will need all the money you can make to do the things you would like to do in your life. There are three Fs for investors: friends, family and fools.
Even if you have never been a business manager, you are already the manager of your own life, says Po Chung, co-founder of DHL International Asia-Pacific, who now teaches entrepreneurship at the University of Hong Kong.
"Every one of us is the entrepreneur of our own life," he told a group of students on a recent visit to Bangkok. "Nobody has lived your life before; you're the first one. So, you can do anything. You can start-up. You can manage [a business to become] a good asset or you can be as poor as you can be, not only in a money sense but also in a spiritual sense."
Chung, who co-authored the book "The First 10 Yards: The Five Dynamics of Entrepreneurship", was lecturing to about 40 students from 13 European countries who took part in the Asian University's "Summer University" programme.
"Many people are very rich in money but very poor in spirit," he said.
"Since life is an entrepreneurial journey and you're the entrepreneur of your life, by understanding, designing, creating and managing your journey, you can control your future."
Giving his life as an example of an "entrepreneurial life-long journey", Chung said his early life was not so affluent because his father lost his businesses during the Communist "liberation war" and the family had to escape from China to Macau. He had to drop out of school and went fishing for two years because his father ran out of money when he was in the third grade.
Then life became better. Chung moved to Hong Kong and was eventually able to join a well-known boarding school, St Stephen's College, and later went to Hong Kong University. He was doing well until he overslept and missed a history examination. His father then sent him to study at the University of the Seven Seas, which was actually a ship that hosted teachers and students who had to sail around the world while studying.
However, Chung had to change his university again because his father wanted him to study science subjects, instead of history or geography. So he signed up for fisheries management at Humboldt State University in Arcata, California.
Chung said that although he never practised fisheries management one day in his life. He was able to apply the knowledge he gained to his life's work.
"I stole shamelessly everything I knew about fisheries and used it in my businesses. I was able to make the 'cross over', and I've been stealing even since: when I talk with people, I asked them questions, [get them] to tell their ideas, and I convert [these] into my businesses."
The courier business was not his first job after graduation. He worked for Topper Toys, a toy manufacturer which he found gave little attention to its workers because "everything she had to do, she could learn in 15 minutes. So, if she didn't come to work, they could easily find someone to replace her.
"In courier services, you can't do that because the courier drives the truck and he's out for three hours. [And while he's out] he can decide either to smile or not to smile. It's not like in McDonald's, [where] everything is under one roof. If a staff member doesn't smile, his supervisor can see he doesn't smile. But if [the courier] doesn't smile, nobody at our company knows.
"So we have to make sure the courier is happy in his life when he walks into a customer's reception area. He has to remember the name of the lady at the reception desk, and pretty soon they will remember his name.
"We paid attention not only to how they were dressed, but made sure they were dating - I had to attend a lot of weddings," Chung said, with a grin.
The opportunity to launch the courier service came after two and a half years with Topper Toys. Chung had been promoted to operations manager, with responsibility for logistics and supply chain management. The skills and knowledge he gained from the toy firm readied him for the moment when Adrian Dalsey, a co-founder of DHL, flew to Hong Kong to offer Topper Toys a cutting-edge delivery service.
After only a few meetings, Chung succeeded in persuading Dalsey to fly back to his US headquarters and convince his partners to award Chung the rights to run DHL's business across the Asia-Pacific region. Chung began his entrepreneurial journey with DHL with US$50,000, only two customers, a secretary, no car and basically nothing else.
During DHL's first 15 years, from 1969-84, the firm expanded into 125 countries - or a new country every five weeks, on average. One of its key success factors was picking the right kind of employees.
"There was one formula in picking our people: we were hiring the kind of people we were willing to follow, others were willing to follow; others were willing to partner with."
Chung said DHL "scanned for viruses on the candidate's personal operating systems" such as their beliefs, values, behaviour, likes, dislikes, integrity and character.
"Basically, [it's about] who are you. Can people trust you? Are you unkind, unfair, shameless, corrupt, rude, a liar, unwise, disloyal, cowardly, a repeater of mistakes, or unforgiving? "
There was also another lesson: getting the right name is very important. Unlike some of its competitors, Chung said, DHL had an initial advantage because its name was easy to pronounce in any language.
"That's why, when I picked the names for my children, I made sure people could see them and were able to read them. Yet they are not common names."
Chung said entrepreneurs had to have a basic quality which he called a "sleep factor".
"Many people think about risk factors, and I admit risk taking is important. But you also have to be able to 'silo' your problems, [leaving yourself the capacity] to go to sleep, even when you get caught," he said, citing his own experience during an initial stage when he was arrested by the police for infringing the Hong Kong Post Office's exclusive right to carry letters in and out of the colony. DHL successfully defended the case.
"There are two things that business school cannot teach an entrepreneur: the first is focus, or 'staying with a problem until it gets done', and the other is passion. An entrepreneur must have enough of these two qualities," he said.
"We have also found that most business schools teach marketing, but do not teach selling. If you're an entrepreneur and you don't know how to sell, it won't work out, because you won't have money or anything else."
Also, Chung advised, don't take an MBA course.
"If you want to become an entrepreneur, don't study for an MBA. Do it [become an entrepreneur] first and come back to take an executive MBA later, because MBA [studies] fill you with all kinds of junk. It's wrong timing - like teaching you to drive when you're 60," he said.
"Me, Inc": Looking at life as a business
People regard as "business" only that part of life that involves money. But, in reality, everything is business, Chung said.
"Your life is business and you're the entrepreneur. You're in the business of providing personal services to anyone around you. You're your most important customer and supplier."
Chung suggested that his students write a "business plan" for their lives, taking into account the needs of their "customers" and "suppliers", who can be anyone from parents to offspring, siblings, friends, business partners or bosses, and all of their "suppliers".
"Consider what they want. Is it moral support, physical help, mental help, social help, advice, companionship, just being there...?"
He said the students' business plans should include a marketing plan for managing their "personal brand", which took into account their "service quality", as well as their tangible and intangible assets.
"The management team is you and your 'tribe', and the returns are 'psychic income' and 'emotional profit', he said.
Chung also urged students to give and take, while staying away from "net takers".
Ten pieces of advice, in hindsight
In concluding his lecture, Chung looked back on his years as an entrepreneur to offer 10 pieces of advice, in hindsight:
1. Spend time with your loved ones before they go away.
2. Follow my life's secret formula: understand, design, create and manage. Then you will control your future.
3. If you want to be an entrepreneur, don't get an MBA - get an EMBA.
4. Don't be in a hurry to get married, to either a spouse or a company. Ninety per cent of your misery or happiness will come from one person, so you want to know more about people in general before you select the one with whom you will spend the rest of your life.
5. Set up a life-long learning programme.
6. A bad break is not the end of the world.
7. Hustle while you wait: luck is when opportunity meets preparedness.
8. Leadership is about trust. Everything else comes second. People will follow you only if they know you will not hurt them.
9. If you don't want people to know about it, don't do it. Live by the golden rule: "don't lie, don't cheat, don't steal."
10. Live off your parents for as long as you can. Buy a house as a multigenerational effort. Property prices will continue to go up. You will need all the money you can make to do the things you would like to do in your life. There are three Fs for investors: friends, family and fools.
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