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ASIAN BUSINESS WISDOM: FROM DEALS TO DOT.COMS  Edited by Dinna Louise C. Dayao |
Question 1: Your book “Asian Business Wisdom: From Deals to Dot.Coms” features articles written by business legends from across the region. What do you think these leaders have to teach us and what were the points you drew from your own work on this book about Asian
business?Answer:That’s a good question! The 31 CEOs in my book present such a wealth of business wisdom that it’s difficult to choose just one or two key ideas. Still, I gleaned the following significant points:
Think different. Outstanding CEOs like Acer Inc. founder Stan Shih and Li & Fung group chairman Victor Fung change the rules by finding new approaches to old problems.
Stan Shih has been called one of the business world’s most original thinkers. He conceived of three major strategies which stand the control-oriented management model on its head. The “fast-food business model” enables Acer to move computer assembly to local plants. As a result, the company flexibly builds products to local tastes and quickly responds to market changes. The “client-server” organizational structure allows each business unit to make its own decisions and shoulder its own risks. The decentralized structure boosts operational efficiency and flexibility. Finally, the “global brand, local touch” strategy, which includes local shareholders, relies on local talent to quickly grasp opportunities in overseas sites. In the process, it establishes solid partnerships worldwide. Combined, these strategies have enabled Acer to become one of the world’s top 10 branded PC vendors.
Victor Fung describes Hong Kong-based Li & Fung—one of Asia’s most successful trading houses—as a “smokeless factory.” Instead of owning plants, the company coordinates the manufacture of high-volume, time-sensitive consumer goods through a network of 67 sourcing offices in 40 countries. Li & Fung has an annual turnover of around $4.2 billion and employs about 5,000 people worldwide.
Work with other people’s brains. Whatever your business, you must have or be able to access the know-how to run it. YTL Corp. CEO Francis Yeoh and Fuji Xerox chairman Yotaro Kobayashi both encourage knowledge sharing to benefit both the companies and their customers. Kobayashi takes pride in the office equipment manufacturer’s “Talknade” (from “talk” and “promenade”) program. At these informal sessions, employees from all levels and areas freely exchange ideas on different subjects. These sessions have resulted in a employee flextime schedule and a venture fund for employees to develop their own business concepts and spin them off into affiliated companies.
On the other hand, Yeoh holds “cabinet meetings” with his team of 30 senior managers every Monday at 10 a.m. on the dot. The self-assured, British-trained civil engineer sits at the helm of Malaysian based group YTL. The company has a global presence in power generation, cement and in the water sector. In Kuala Lumpur, it owns and operates the high-speed train from the international airport and owns the Ritz Carlton and Marriott hotels.
Find yourself a quiet corner. Because we operate in a 24/7 world, it’s essential that we find the time to recharge our batteries. This is why despite their busy schedules, visionary leaders like Ayala Corp. CEO Jaime Augusto Zobel de Ayala II and DHL cofounder Po Chung make time for activities beyond their work interests.
Zobel de Ayala, CEO of the prominent Philippine conglomerate, is an avid environmentalist. He also diligently works out with a personal trainer and reads stories to his children. On the other hand, Chung has conceived of a new mental model using business practices to “better manage our lives, live them with more purpose, and increase our happiness.”
Question 2: Your book has a unique format that includes the Asian business leader’s biography, an article he or she authored, and a list of online resources directing the reader to the featured company’s website and related articles, organizations, and publications. What led you to pick this format?
Answer:I see myself as an experienced student of ideas. For 12 years I worked as associate editor of an Asian management magazine. There, I read the best business publications and conceived articles on topics ranging from customer service to operations management. As a result, I learned to separate the wheat from the chaff and quickly grasp information. I also acquired the habits of benchmarking world-class publications and creating more value for readers by pointing them to additional resources.
So when I was completing John Wiley’s book proposal, I researched on books similar to my proposed book. I studied each book’s strengths and weaknesses and incorporated the best features into my book. I decided to enrich each essay with a brief biography and a list of online resources. The biography provides readers with insightful information about the CEO’s life and business achievements and philosophy. And the list of related Web sites, articles, and publications directs them to more information sources.
Question 3: Why did you pick an essay format as opposed to an interview format for your book? Do you feel your book is stronger and gives a better view of Asian business because of this
format?Answer: I first thought of the book’s readers and what would benefit them. I wanted to offer them the unique opportunity to hear what some of Asia’s best and brightest business minds have to say, in their own words, about fundamental business processes and success principles. I aimed to give them an inside look into the key decision points, breakthrough insights, and proven strategies of some of the region’s leading CEOs. And I believed an essay format, rather than a question-and-answer format, more directly presented these insights to the reader. In addition, it captured the personality of this diverse group of dynamic leaders.
Question 4: Your book is divided into five sections: “Success Principles,” “Instilling Corporate Culture,” “The Entrepreneurial Spirit,” “Tough Business Challenges” and “Marketing and Customer Service Strategies.” What led you to focus on these five areas and how did you decide on which chief executive to pick for each area?
Answer: It’s actually the other way around. I researched on Asian business leaders who could share their practical and universal insights into fundamental business processes and how to succeed, not just in business, but also in life. I then invited these CEOs to send me copies of existing essays, speeches, and books they have written. Then I organized the material I collected into the five categories that I felt best presented them.
Question 5: In the section on entrepreneurship, company founders delve into the challenges and rewards of growing one’s own business. Who do you consider to be master entrepreneurs?
Answer: The names of fast-food king William Heinecke and Silicon Valley venture capitalist Vinod Khosla come to mind. William Heinecke, CEO of conglomerate The Minor Group, defies conventional wisdom. He persuaded lactose-intolerant Thais to eat pizza. He also built a luxury shopping, entertainment, and hotel complex in Pattaya at a time when most people considered it a bad investment.
Heinecke’s entrepreneurial skills enabled him to survive the Asian crisis. He even prospered by cutting prices and streamlining the two most important parts of his business empire: food and hotels. Today, Heinecke’s The Pizza Company has 105 outlets while Minor Food, Thailand’s largest restaurant operator, has over 350 outlets.
Not bad for an American who arrived in Bangkok in 1963 and started an advertising business with a $1,200 loan when he was just 18. The naturalized Thai has distilled his hard-won insights into a best-selling book, “The Entrepreneur: 21 Golden Rules for the Global Business Manager” (John Wiley & Sons Asia Pte. Ltd., 2000).
Vinod Khosla was among the first to understand that Internet technology and fiber optics could make communications so fast, cheap, and easy to install that it would unleash limitless productivity. He placed his bets on a handful of telecom-gear companies, such as Cerent and Siara Systems. And the risk paid off; the two companies sold for a combined $11.2 billion in 1999.
The venture capitalist at Kleiner Perkins Caufield & Byers attributes his success to his hands-on experience running Sun Microsystems—which he co-founded at the ripe old age of 27—and his business philosophy. Khosla doesn’t just spread cash. He nurtures startups. He claims to spend “less that one percent” of time looking at the financial aspects of a deal. Instead he’d rather focus on the “process of building a company”—investing time in strategy, building relationships, and recruiting talent.
Question 6: The section on marketing and customer services strategies includes Ralph Kugler’s article on “Marketing in East Asia: The Fallacies and the Realities.” In it, the Unilever executive debunks some of the myths of marketing in Asia. Do you agree with the points he raises?
I wholeheartedly agree with Kugler’s points:
There are many Asias. There is a wide range of races, religions, incomes, and levels of sophistication in the region. While China has a huge population of 1.26 billion, for example, its per capita GDP (in 2000) is just $3,600. On the other hand, tiny Singapore, with a population of 4.3 million, boasts of the world’s fifth-highest per capita GDP of $26,500 (in 2000). While the Philippines is predominantly Christian Catholic, Indonesia and Malaysia are mainly Muslim.
National populations are not homogenous. Behavior and social attitudes are more often based on social class than on nationality. For example, there may be more similarities between the urban populations of Malaysia, Thailand, and Taiwan than within each country alone. In China, there is enormous diversity among major urban centers such as Beijing, Shanghai, and Guangzhou, as well as among large and small cities and rural areas within the same region.
Lower-income consumers, not the middle class, make up the bulk of the buying public. To better understand Asian consumers, Kugler advises marketers to leave the cities. In India, for example, around 700 million people—70 percent of the total population—live in rural villages. And ninety percent of the rural population is concentrated in villages with a population of less than 2,000.
Yet Hindustan Lever has gained a strong foothold in rural markets. The company became India’s largest fast-moving consumer goods company by generating consumer awareness through unconventional media—including fairs and cinema vans—and building a comprehensive distribution network.
Question 7: Which companies would you single out as being masters of the marketing game?
Answer: I admire Jollibee Foods and Unilever Indonesia for their marketing savvy. Jollibee is the Philippines’ largest and most profitable fast-food chain. The homegrown 800-outlet group has beaten America’s McDonald’s into second place in the country. And, in spite of economic storms, the company has maintained strong earnings growth.
Its secret? Unlike its rivals, Jollibee makes a virtue of changing its menu to suit local tastes. Filipinos like burgers that are flavorful and juicy, local noodle dishes topped with smoked dried fish bits, onion leeks, shrimp and hard-boiled eggs, and mango pie. In short, Jollibee provides better food—or at least food that is “better” to most Filipinos. To this day, founder Tony Tan still attends the weekly three-hour meetings of Jollibee’s “new products board.” The decisions made there find their way into “the commissary,” a top-secret spice kitchen and the nerve center from which Jollibee outlets are supplied.
Aside from monitoring customers’ tastes, Jollibee also keeps a close eye on their spending power. During the Asian crisis, the company offered “value meals” at different price points and pulled in new customers as high-income families switched from gourmet restaurants to fast food.
Unilever Indonesia is another company that uses smart pricing. To make sure all Indonesians can afford at least some of its products, Unilever introduced single-use sachets packets of Sunsilk shampoo and Rinso detergent for about four cents each. As a result, the company sold 2.9 billion sachets of Rinso and 3.8 billion of Sunsilk last year.
Efficient distribution also boosts Unilever’s net profits, which have leapt fivefold in the past three years to $89 million. The company’s network of nearly 20,000 distributors and 2 million retailers spreads across the far-flung archipelago. As a result, Unilever claims at least one of its brands can be found in 95 percent of Indonesian homes.
Question 8: What projects are you working on at the moment?
Answer:I’m pleased to inform you that my article on “Competing on Costs” is included in the book “BUSINESS: The Ultimate Resource” (Perseus, 2002). It is one of 160 original best-practice essays featured in the 2,200-page compendium of incisive essays, lively biographies, and authoritative source materials.
The article describes Asian companies that practice cost control as a strategic imperative. These include the likes of Taiwanese electronics designer-manufacturer Quanta Group, Indonesian retailer Ramayana Lestari Sentosa, and Singapore Airlines who don’t wait for a crisis to cut costs. Instead, they rethink the distinct activities needed to create their products or services. As a result, they produce goods or deliver services more cheaply than their competitors do. This translates into better profitability and potentially more cash flow.
The article summarizes the common traits of low-cost leaders—such as cost containment expertise, operational excellence, and a corporate culture that abhors waste. It also features related books and Web sites.
As a freelance writer-editor, I am pursuing opportunities to learn and write about new topics. I have been traveling throughout the country to document the programs of UNICEF Philippines and editing online learning programs for a training company.
| Dinna Louise C. Dayao (dinnadayao@hotmail.com) is the author of “Asian Business Wisdom: Lessons from the Region’s Best and Brightest Business Leaders” (2000) and its revised edition, “Asian Business Wisdom: From Deals to Dot.Coms” (2001). Both books are published by John Wiley & Sons Asia Pte. Ltd. They feature insightful and informative articles from visionary Asian CEOs. |
About the Interviewer: Christopher W. Runckel, a former senior US diplomat who served in many counties in Asia, is a graduate of the University of Oregon and Lewis and Clark Law School. He served as Deputy General Counsel of President Gerald Ford’s Presidential Clemency Board. Mr. Runckel is the principal and founder of Runckel & Associates, a Portland, Oregon based consulting company that assists businesses expand business opportunities in Asia. (www.business-in-asia.com)
Until April of 1999, Mr. Runckel was Minister-Counselor of the US Embassy in Beijing, China. Mr. Runckel lived and worked in Thailand for over six years. He was the first permanently assigned U.S. diplomat to return to Vietnam after the Vietnam War. In 1997, he was awarded the U.S. Department of States highest award for service, the Distinguished Honor Award, for his contribution to improving U.S.-Vietnam relations. Mr. Runckel is one of only two non-Ambassadors to receive this award in the 200-year history of the U.S. diplomatic service.
www.Business-in-Asia.com