Any sensible companies will tighten up and re-look at any frivolous expense lines and most importantly to strengthen their governance practices and delivery of top and bottom lines in the wake of any crisis. While company performance and in particular staff performances in the years or even months leading up to the turmoil is the subject of debates, company performance is critical now as it needs to respond to the financial market turmoil and the global recession so as to stay afloat with its nose above water. Almost everyone’s nose will be wet and the financial crunch must mean that most pockets will be affected.
Attrition by selection due to poor performance or due to higher expectation is normal for times like this. Either staff is not doing what is expected of them, or the expectations of staff is far too high as they may have to take on multiple job roles and function possibly with lesser support. I think that both scenarios are possible and the mental and physical well-being of these staffs must be strained to a greater or lesser extent and there will be no way out of water without getting your nose wet. Personally, I think we need to create company-level governance and compensation structure that allow for flexibility and at the same time without creating conflicts in the performance and pay equation.
The structure of running a sustainable business will mean that companies need a radical overhaul and also to manage the attitudes and competence of the individual staff. In particular we need to create a structure that fosters challenge in crisis without creating conflict and fear. To keep the company afloat and inevitably to ensure that the pockets are not hit badly is the responsibility of all of us, not just the management or the board. The natural herd instinct in crisis is to run away from source of problem which is flight or to stand guard to fight.
The real challenge is to get the herd together to run in the same direction with sufficient motivations, monetary or otherwise.
Monday, May 25, 2009
Sunday, May 17, 2009
The Principle of Punctuality
Those whom I know who's always delay,
And to always procrastinate;
Never to be reliable and pushing affairs day to day
Never responsible and do things late.
The successful one always let every hour be in its place
A time fixed is firm and should not frivolously shift,
The successful one's hands are always full but still enough time and space
To do things right, on time and in a jive.
And when the hour arrives, be there,
Never be late.
It shows the haphazard state of mind and lack of care.
What's gone is gone - every minute and hours whatever date.
Always to be before your appointed time,
than be sometime behind;
Punctuality says much about a person and his life
A principled person with a beautiful and punctual mind.
Let punctuality and care
Seize every flitting hour.
Opportunity waits for no man but one who dare
Be sharp, be punctual, be wise and never dull.
And to always procrastinate;
Never to be reliable and pushing affairs day to day
Never responsible and do things late.
The successful one always let every hour be in its place
A time fixed is firm and should not frivolously shift,
The successful one's hands are always full but still enough time and space
To do things right, on time and in a jive.
And when the hour arrives, be there,
Never be late.
It shows the haphazard state of mind and lack of care.
What's gone is gone - every minute and hours whatever date.
Always to be before your appointed time,
than be sometime behind;
Punctuality says much about a person and his life
A principled person with a beautiful and punctual mind.
Let punctuality and care
Seize every flitting hour.
Opportunity waits for no man but one who dare
Be sharp, be punctual, be wise and never dull.
All Signs Pointing Up- Is this a Real Bull Charge?
Is the crisis really averted since we are seeing emerging up-trends on all the global indexes? The temptation is to follow the bull’s tail and smell and charge ahead but that is dangerous. Personally, I suspect that this rebound is a bear-market capitulation or “selling the bottom”. With the STI rebounding more than 50% since early March is enough to bring cheers to stock chasers.
Those of us who are deep in the water will hope that confidence is finally restored and that any market gains will be more enduring instead of those gyrations we see with each economic data releases like plunging export sales or growing retrenchment numbers. All eyes shall be on the earnings and guidance announcements and macroeconomic indicators in the first half of 2009. With that, we should have better visibility on whether the prescriptions of fiscal and monetary dosages and injections by the Fed is working up the confidence level to eventually see the thawing of the credit markets and consumers’ confidence in US. Any positive upturn there will have ramifications for an ultra-sensitive Singapore since we are so globally plugged.
I see a range-bound market with more upside than downside down the road and it is walking the fine balance of participating in this rally while watching for any pull-back and if the market does show some signs of flagging, my gut feel is that it will not fall through to the March’s trough.
No need for crystal ball gazing or some tea leave reading, I am just betting my guts that we are about to have some fresh air and I am not holding my breath anymore.
Those of us who are deep in the water will hope that confidence is finally restored and that any market gains will be more enduring instead of those gyrations we see with each economic data releases like plunging export sales or growing retrenchment numbers. All eyes shall be on the earnings and guidance announcements and macroeconomic indicators in the first half of 2009. With that, we should have better visibility on whether the prescriptions of fiscal and monetary dosages and injections by the Fed is working up the confidence level to eventually see the thawing of the credit markets and consumers’ confidence in US. Any positive upturn there will have ramifications for an ultra-sensitive Singapore since we are so globally plugged.
I see a range-bound market with more upside than downside down the road and it is walking the fine balance of participating in this rally while watching for any pull-back and if the market does show some signs of flagging, my gut feel is that it will not fall through to the March’s trough.
No need for crystal ball gazing or some tea leave reading, I am just betting my guts that we are about to have some fresh air and I am not holding my breath anymore.
Monday, May 11, 2009
H1N1 Fears
All of humanity is under threat and markets around the world will seize up. God forbids but if the spread escalates into the global pandemic phase characterized by community level outbreaks, there will be a quick succession of market disturbances with the World Bank estimating that the pandemic can cost $3 trillion and resulting in 5% drop of GDP. This time, the world at large responded swiftly to this outbreak but the emotional fear still cannot be allayed with any assurances of stockpiles of drugs and vaccines. Though there were prognostications of the worst of developments with this outbreak, I think the scenario is still highly fantastical though the effect of any the outbreak is painfully relatable with Sars. We have to get over the single most terrifying human fear.
Precautionary measures have already been installed and the Singapore government has put up all the necessary frameworks to ensure that any possible propagation of the H1N1 can be checked with a disciplined tracking system. This is an opportunity for national and global solidarity as concerted responses are now seen across countries from China to the US. This is a public health emergency of international concern and the world will have to watch how the fight between H1N1 and mankind will pan out after all the possible precautionary measures are adopted with quarantines and contact tracings.
At the end, it is just hold on to our sanity as the outbreak is too large for any nation to bear and the H1N1 too small for us to be too scared. As one doctor told me, “Wash your hands as frequently as you can.”
Precautionary measures have already been installed and the Singapore government has put up all the necessary frameworks to ensure that any possible propagation of the H1N1 can be checked with a disciplined tracking system. This is an opportunity for national and global solidarity as concerted responses are now seen across countries from China to the US. This is a public health emergency of international concern and the world will have to watch how the fight between H1N1 and mankind will pan out after all the possible precautionary measures are adopted with quarantines and contact tracings.
At the end, it is just hold on to our sanity as the outbreak is too large for any nation to bear and the H1N1 too small for us to be too scared. As one doctor told me, “Wash your hands as frequently as you can.”
Tuesday, May 5, 2009
From Mourn to a New Morning
Every year for the last 10 years since 1999, my good friend Mike will write poem to his beloved wife Rosie and publish a poem a year. Today is the 10th year of her passing and in today's Straits Times, it appears once more.
I read his poem with a tinge of sadness and a sense of forlorn hangs over me. A grieving friend who has lived in the long shadows of his beloved wife.
I share his loss and grief and pen my sentiments in the loving memory of Rosie,
The seasons have come and passed;
Your constant yearning and memory of Rosie will forever last.
Those winters have been long and the coldness bites;
I am sure Rosie will like to see you in a better light.
All the sorrows, pains and anguishes mysteriously melt
As long as in God's Hand you submit, they'll be dealt
Be strong and move on to your next mission.
For this life you live, live well with a passion.
Ten years has passed, ten summers of heat and ten winters of cold;
Enough sufferings, reminiscing and recounting;
In God's Land, Rosie is watching over you;
Pining that you'll live strong and live life with its many hues.
From mourn to the new morning;
Open your eyes, a new dawn appear before your eyes
A new dare, a new hope, and bid all yester-years good byes!
Michael, in memory of your wife Rosie
I read his poem with a tinge of sadness and a sense of forlorn hangs over me. A grieving friend who has lived in the long shadows of his beloved wife.
I share his loss and grief and pen my sentiments in the loving memory of Rosie,
The seasons have come and passed;
Your constant yearning and memory of Rosie will forever last.
Those winters have been long and the coldness bites;
I am sure Rosie will like to see you in a better light.
All the sorrows, pains and anguishes mysteriously melt
As long as in God's Hand you submit, they'll be dealt
Be strong and move on to your next mission.
For this life you live, live well with a passion.
Ten years has passed, ten summers of heat and ten winters of cold;
Enough sufferings, reminiscing and recounting;
In God's Land, Rosie is watching over you;
Pining that you'll live strong and live life with its many hues.
From mourn to the new morning;
Open your eyes, a new dawn appear before your eyes
A new dare, a new hope, and bid all yester-years good byes!
Michael, in memory of your wife Rosie
Directorships - Hands too Full?
How many directorships are too many? Normative advice would emphasize the importance of limiting the number of directorships any individual should hold due to the workloads and responsibility they entail. The burden of holding directorships is still onerous notwithstanding the size of the company or whether they are dormant or not.
Typically, we do see directors who serve larger firms and boards are more likely to attract directorships. So is it a case of “A Few Good Men” on the merry-go-round serving many boards? Or is it a case where directors are luminaries or well-known public figures put on boards with little roles except to lend credence to the companies?
The impact of multiple directorships on corporate diversification is real and may affect the quality of oversight and thus influence the degree of their contributions to the companies’ values. Specifically, I find that directors’ busyness is inversely related to his or her contribution to the companies’ value. In other words, companies where board members hold more outside board seats are likely to have the directors suffering attention deficit especially if they are nominated to sit on sub-committees that have oversight roles. The negative effect of having overcommitted directors on the board cannot be discounted and in fact must be more pronounced in listed public companies where they are put under the spotlight during crisis or at any extraordinary meetings.
I am not suggesting that multiple directors shirk their responsibilities to serve on board committees or that multiple directorship are associated with a greater likelihood of neglect, collegial group-think or lapses.
Too Busy to Mind the Business? Is it really a case of a few good men or women for the jobs? Whether we deal with one hand or the other hand, we still only have 10 fingers to have a grip on the cards we want to deal. So long as the cards are not drop, all things will be well.
Typically, we do see directors who serve larger firms and boards are more likely to attract directorships. So is it a case of “A Few Good Men” on the merry-go-round serving many boards? Or is it a case where directors are luminaries or well-known public figures put on boards with little roles except to lend credence to the companies?
The impact of multiple directorships on corporate diversification is real and may affect the quality of oversight and thus influence the degree of their contributions to the companies’ values. Specifically, I find that directors’ busyness is inversely related to his or her contribution to the companies’ value. In other words, companies where board members hold more outside board seats are likely to have the directors suffering attention deficit especially if they are nominated to sit on sub-committees that have oversight roles. The negative effect of having overcommitted directors on the board cannot be discounted and in fact must be more pronounced in listed public companies where they are put under the spotlight during crisis or at any extraordinary meetings.
I am not suggesting that multiple directors shirk their responsibilities to serve on board committees or that multiple directorship are associated with a greater likelihood of neglect, collegial group-think or lapses.
Too Busy to Mind the Business? Is it really a case of a few good men or women for the jobs? Whether we deal with one hand or the other hand, we still only have 10 fingers to have a grip on the cards we want to deal. So long as the cards are not drop, all things will be well.
Betting on Singapore Property
The volatility of the property market has shown signs of abatement and if there is any restoration of confidence, we'll increasingly see the "bet-on-prime" phenomenon. The price sensitivity of these tier 1 high end property in Orchard road will generally has a greater price elasticity in terms of rebound.
Other factors like the lower SIBOR rate will mean lower and cheaper mortgage rates which will in turn spur investors' appetite for property in Singapore - which over the long term will surely climb back from the low floor. Simple reason is with the scarcity of land coupling with a burgeoning population, land price can only shape up. I personally believe that the property market will remain buoyant with bargain hunting and a bottom out of prices will likely come at the second or third quarter. Generally, property in Singapore will unlikely lose its lustre for too long a time.
Other factors like the lower SIBOR rate will mean lower and cheaper mortgage rates which will in turn spur investors' appetite for property in Singapore - which over the long term will surely climb back from the low floor. Simple reason is with the scarcity of land coupling with a burgeoning population, land price can only shape up. I personally believe that the property market will remain buoyant with bargain hunting and a bottom out of prices will likely come at the second or third quarter. Generally, property in Singapore will unlikely lose its lustre for too long a time.
China's Resilence
While most of the world economies are convalescing and convulsing in intensive care with a global financial heart attack, the Chinese government’s $880 billion stimulus defibrillated the Chinese weak heart -bringing life back to the economy though not a strong “V”-shaped recovery is to be guaranteed.
The Chinese economy has already had its hard landing with China’s growth grinding to the slowest pace in a decade with Q1 growth sinking to 6.1%. China’s growth may have slowed but its growth is still on track unlike major economies in US, Europe and Japan which are contracting. Chinese economy is benefiting from the government’s aggressive monetary and fiscal stimulus. Given that most strategic sectors are centrally controlled by the government, stimulus measures should take effect more swiftly with actions taken to redirect growth towards more sustainable path of domestic demand, as well as plans to improve social safety nets such as healthcare reforms- all do bode well for the economy. The health of China’s banking system compared with the mayhem and bloodshed in key western economies helped it weather the storm. China’s banks were largely unscathed by the financial turmoil mired in complicated derivatives and toxic assets. The country’s economy had been holding up despite taking a hard hit. With the central government spending on health, education, infrastructures like roads and power grid and social safety, the stimulus being broad-based will uplift China when the high tide returns.
China still has its own risks. A major risk is the high rate of unemployment accompanied by its nascent and weak social safety regime, unrest may be brewing. While migrant worker unemployment is a pervasive problem, the leadership fears to a much greater extent the possibility of widespread student unrest leading to social problem that may destabilize the political stability.
The central government has all the economic levers at its disposal and to mobilize all its institutions - central government, local governments and the entire banking system - to boost government-influenced investments. China’s new lending surged more than sixfold from a year earlier to a record 1.89 trillion yuan ($277 billion) in March, adding to signs that growth in the world’s third-biggest economy is gathering pace though it is left to be seen how some of these allocations may be misappropriated and may lay in non-performing loans.
How these forces play out would also determine the shape of recovery in 2009-10 – that is, whether it will be a sharp, V-shaped affair, or something more drawn out.
The Chinese economy has already had its hard landing with China’s growth grinding to the slowest pace in a decade with Q1 growth sinking to 6.1%. China’s growth may have slowed but its growth is still on track unlike major economies in US, Europe and Japan which are contracting. Chinese economy is benefiting from the government’s aggressive monetary and fiscal stimulus. Given that most strategic sectors are centrally controlled by the government, stimulus measures should take effect more swiftly with actions taken to redirect growth towards more sustainable path of domestic demand, as well as plans to improve social safety nets such as healthcare reforms- all do bode well for the economy. The health of China’s banking system compared with the mayhem and bloodshed in key western economies helped it weather the storm. China’s banks were largely unscathed by the financial turmoil mired in complicated derivatives and toxic assets. The country’s economy had been holding up despite taking a hard hit. With the central government spending on health, education, infrastructures like roads and power grid and social safety, the stimulus being broad-based will uplift China when the high tide returns.
China still has its own risks. A major risk is the high rate of unemployment accompanied by its nascent and weak social safety regime, unrest may be brewing. While migrant worker unemployment is a pervasive problem, the leadership fears to a much greater extent the possibility of widespread student unrest leading to social problem that may destabilize the political stability.
The central government has all the economic levers at its disposal and to mobilize all its institutions - central government, local governments and the entire banking system - to boost government-influenced investments. China’s new lending surged more than sixfold from a year earlier to a record 1.89 trillion yuan ($277 billion) in March, adding to signs that growth in the world’s third-biggest economy is gathering pace though it is left to be seen how some of these allocations may be misappropriated and may lay in non-performing loans.
How these forces play out would also determine the shape of recovery in 2009-10 – that is, whether it will be a sharp, V-shaped affair, or something more drawn out.
Balancing Recession with Headcount Cut
It is a foolhardy way for companies to cut their way out of a recession, especially human capital resources. It is a no-brainer way to resource planning. A consistent fixture in most of these successful companies is their communications – articulating a clear vision of the future so that everyone “gets it” and can move on with the companies.
These messages are people-oriented and they elicit honest feedback from the ranks and files. Such communication ensures that the companies are focused on building and sustaining high engagement with their employees. Morale will be high since there is a strong promotion of inclusiveness during bad times even though it may mean having their pay cut or work week shorten.
It is a matter of attitudes, feelings and emotions that makes work enjoyable and ignites people's energy to do more than they thought they could. It is about creating that atmosphere of success even in difficult times and they can see their journey with the companies. Great employers of choice understand the numbers, but they also touch people's hearts.
These messages are people-oriented and they elicit honest feedback from the ranks and files. Such communication ensures that the companies are focused on building and sustaining high engagement with their employees. Morale will be high since there is a strong promotion of inclusiveness during bad times even though it may mean having their pay cut or work week shorten.
It is a matter of attitudes, feelings and emotions that makes work enjoyable and ignites people's energy to do more than they thought they could. It is about creating that atmosphere of success even in difficult times and they can see their journey with the companies. Great employers of choice understand the numbers, but they also touch people's hearts.
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