FINANCIAL CRISIS: The problem of the heart

Some of the things that the writer mentioned I strongly agree with: Having an MBA does not guarantee you a good life, as much as not having an MBA is a sure ticket to a miserable life. These are tools, but as the workman, you are in control of your tools; if properly utilized, they may help you, but if misused, especially with 'power' tools, they only spell disaster.

Read on...

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Closing business schools is not the answer, perhaps relooking education is
Letter from Patrick Liew


I refer to “MBA schools, just shut them down” (March 28-29), and would like to commend the writer for a well-written but flawed article.

First, I am an MBA graduate and proud of the education I received in one of the top business schools, so I may be biased.

While it is true many of the top chief executive officers who are involved in the current financial crisis have an MBA, it is only a half-truth. There are also many other MBA graduates who, because of and not despite of their education, are running healthy companies that are contributing to the economy and society.

In addition, the financial crisis, just like any systemic failure, is the result of a variety of organisations and people from different educational backgrounds, professions, and experience.

MBA graduates cannot and do not have the authority, ability, capacity and all the flexibility to create a worldwide bane or boon.

If they do, then all the more, we should not shut business schools down but study their educational system to change and improve it.

Graduates from reputable universities who are professional will know that they need to enhance financial, environmental and social bottomlines to achieve sustainable success.

To do so, they cannot have an elitist attitude, be “mechanistic”, and do everything according to “a textbook”. There are few, if any, absolute systems or processes to run a business, just as there is no fixed way to write an article. I may be wrong and I am open to be corrected.

In my personal opinion, the financial crisis is caused by leaders. But, please, do not shut down leadership schools or ban leaders. I am referring to toxic leaders who are characterised by negative purposes, performance, partnerships and pursuits.

In the final analysis, the heart of the problem is the problem of the heart. If the heart of a leader or group of leaders, or anybody for that matter, is not for the betterment of community and society, we will continue to have crisis and problems. Perhaps we need to inject more moral and ethics training in the curriculum of educational institutions.


The writer is CEO of HSR Property Group.


From TODAY, Voices
Wednesday, 01-April-2009

AMERICA THE TARNISHED

NEWS COMMENT

These days, it’s looking like the Bernie Madoff of economies
PAUL KRUGMAN

TEN years ago, the cover of Time magazine featured Mr Robert Rubin, then Treasury Secretary, Mr Alan Greenspan, then Federal Reserve Chairman, and Mr Lawrence Summers, then Deputy Treasury Secretary.

Time dubbed the three “the committee to save the world”, crediting them with leading the global financial system through a crisis that seemed terrifying at the time, although it was a small blip compared with what we are going through now.

All three were Americans, but nobody considered that odd. After all, in 1999 the United States was the unquestioned leader of the global response. That role was only partly based on American wealth; it also reflected America’s stature as a role model. The US, everyone thought, was the country that knew how to do finance right.

How times have changed.

Never mind that two members of the committee have since succumbed to the magazine cover curse, the plunge in reputation that often follows lionisation in the media. (Mr Summers, now head of the National Economic Council, is still going strong.)

Far more important is the extent to which America’s claims of financial soundness — claims often invoked as the country lectured other countries on the need to change their ways — have proved hollow.

Indeed, these days America is looking like the Bernie Madoff of economies: For many years it was held in respect, even awe, but it turns out to have been a fraud all along.

It’s painful now to read a lecture that Mr Summers gave in early 2000, as the economic crisis of the 1990s was winding down. Discussing the causes of that crisis, he pointed to things that the crisis countries lacked — and that, by implication, the US had. These things included “well-capitalised and supervised banks” and reliable, transparent corporate accounting. Oh well.

One of the analysts Mr Summers cited in that lecture, by the way, was the economist Simon Johnson. In an article in the current issue of The Atlantic, Mr Johnson, who served as the chief economist at the International Monetary Fund and is now a professor at the Massachusetts Institute of Technology, declares that America’s current difficulties are “shockingly reminiscent” of crises in places such as Russia and Argentina — including the key role played by crony capitalists.

In America as in the Third World, he writes, “elite business interests — financiers, in the case of the US — played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive”.

Now, in fairness we have to say that the United States was far from being the only nation in which banks ran wild. Many European leaders are still in denial about the continent’s economic and financial troubles, which arguably run as deep as our own — although their nations’ much stronger social safety nets mean that Americans are likely to experience far more human suffering. Still, it’s a fact that the crisis has cost America much of its credibility, and with it much of its ability to lead.

And that’s a very bad thing.

Like many other economists, I’ve been revisiting the Great Depression, looking for lessons that may help us avoid a repeat performance. And one thing that stands out from the history of the early 1930s is the extent to which the world’s response to crisis was crippled by the inability of the world’s major economies to cooperate.

The details of our current crisis are very different, but the need for cooperation is no less. President Barack Obama got it exactly right last week when he declared: “All of us are going to have to take steps in order to lift the economy. We don’t want a situation in which some countries are making extraordinary efforts and other countries aren’t.”

Yet that is exactly the situation we’re in. I don’t believe that even America’s economic efforts are adequate, but they’re far more than most other wealthy countries have been willing to undertake. And this week’s G20 summit ought to be an occasion for Mr Obama to chide and chivy European leaders, in particular, into pulling their weight.

But these days foreign leaders are in no mood to be lectured by American officials, even when — as in this case — the Americans are right.

The financial crisis has had many costs. And one of those costs is the damage to America’s reputation, an asset the country has lost just when her people, and the world, need it most. THE NEW YORK TIMES

From TODAY, World
Tuesday, 31-March-2009

Sensible Insight from Lee Kuan Yew’s Daughter, Dr Lee Wei Ling

This message by Dr Lee Wei Ling, daughter of former PM Lee Kuan Yew, is really full of reminders and wake-up calls, especially for Singaporeans. As it is circulating in the e-mail and blogs, I find it still worthwhile to capture it, in its entirety, as its message will be relevant, now, and in the future.

Read on.

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"In 2007, in an end-of-year message to the staff of the National Neuroscience Institute, I wrote:

'Whilst boom time in the public sector is never as booming as in the private sector, let us not forget that boom time is eventually followed by slump time. Slump time in the public sector is always less painful compared to the private sector.'

Slump time has arrived with a bang.

While I worry about the poorer Singaporeans who will be hit hard, perhaps this recession has come at an opportune time for many of us. It will give us an incentive to reconsider our priorities in life.

Decades of the good life have made us soft. The wealthy especially, but also the middle class in Singapore, have had it so good for so long, what they once considered luxuries, they now think of as necessities.

A mobile phone, for instance, is now a statement about who you are, not just a piece of equipment for communication. Hence many people buy the latest model though their existing mobile phones are still in perfect working order.

A Mercedes-Benz is no longer adequate as a status symbol. For millionaires who wish to show the world they have taste, a Ferrari or a Porsche is deemed more appropriate.

The same attitude influences the choice of attire and accessories. I still find it hard to believe that there are people carrying handbags that cost more than thrice the monthly income of a bus driver, and many more times that of the foreign worker labouring in the hot sun, risking his life to construct luxury condominiums he will never have a chance to live in.

The media encourages and amplifies this ostentatious consumption. Perhaps it is good to encourage people to spend more because this will prevent the recession from getting worse. I am not an economist, but wasn't that the root cause of the current crisis - Americans spending more than they could afford to?

I am not a particularly spiritual person. I don't believe in the supernatural and I don't think I have a soul that will survive my death. But as I view the crass materialism around me, I am reminded of what my mother once told me: 'Suffering and deprivation is good for the soul.'

My family is not poor, but we have been brought up to be frugal. My parents and I live in the same house that my paternal grandparents and their children moved into after World War II in 1945. It is a big house by today's standards, but it is simple - in fact, almost to the point of being shabby.

Those who see it for the first time are astonished that Minister Mentor Lee Kuan Yew's home is so humble. But it is a comfortable house, a home we have got used to. Though it does look shabby compared to the new mansions on our street, we are not bothered by the comparison.

Most of the world and much of Singapore will lament the economic downturn. We have been told to tighten our belts. There will undoubtedly be suffering, which we must try our best to ameliorate.

But I personally think the hard times will hold a timely lesson for many Singaporeans, especially those born after 1970 who have never lived through difficult times.

No matter how poor you are in Singapore , the authorities and social groups do try to ensure you have shelter and food. Nobody starves in Singapore .

Many of those who are currently living in mansions and enjoying a luxurious lifestyle will probably still be able to do so, even if they might have to downgrade from wines costing $20,000 a bottle to $10,000 a bottle. They would hardly notice the difference.

Being wealthy is not a sin. It cannot be in a capitalist market economy. Enjoying the fruits of one's own labour is one's prerogative and I have no right to chastise those who choose to live luxuriously.

But if one is blinded by materialism, there would be no end to wanting and hankering. After the Ferrari, what next? An Aston Martin? After the Hermes Birkin handbag, what can one upgrade to?

Neither an Aston Martin nor an Hermes Birkin can make us truly happy or contented. They are like dust, a fog obscuring the true meaning of life, and can be blown away in the twinkling of an eye.

When the end approaches and we look back on our lives, will we regret the latest mobile phone or luxury car that we did not acquire? Or would we prefer to die at peace with ourselves, knowing that we have lived lives filled with love, friendship and goodwill, that we have helped some of our fellow voyagers along the way and that we have tried our best to leave this world a slightly better place than how we found it?

We know which is the correct choice - and it is within our power to make that choice.

In this new year, burdened as it is with the problems of the year that has just ended, let us again try to choose wisely.

To a considerable degree, our happiness is within our own control, and we should not follow the herd blindly."

January 4, 2009

The writer is director of the National Neuroscience Institute

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To read another rendition, see here.

Brain Food: Drug Truths

DRUG TRUTHS: Dispelling the myths about pharma R&D

Dr John LaMattina


Big pharmaceutical companies have produced numerous life-saving medications that have benefited many patients. However, they are also often thought to be money-minded by charging a lot of money for their drugs.

In this book, former president of global research and development at drug company Pfizer, Dr John LaMattina, seeks to dispel some of the misconceptions about drug development in the industry.

The book is divided into four parts. The first two parts discuss the drug discovery process to treat cardiovascular diseases and the role that pharmaceutical R&D plays in healthcare. The second half of the book discusses the profit considerations of the industry and its future.

The pharmaceutical industry is undergoing a time of mergers, reduced R&D budgets and staff cuts. Dr LaMattina predicts that the industry will see more consolidation, increased safety studies on drugs and more research on different drugs.

But do new medicines add to healthcare costs with little benefit?

Does the industry spend more on advertising than R&D? And does the industry take too long to discover new drugs? These are some of the notions he sets about to dispel.

Narrated with concrete examples of the research and clinical efforts behind bringing a drug to the market, the book offers an insider’s account of the reality of the drug discovery process.
ONG DAI LIN

From Today, Succeed
Monday, 30-March-2009

CEO 101, from Canon CEO

How do you motivate your staff, especially in these economic times?

MR SATOSHI KIMURA, PRESIDENT AND CEO
SOUTH AND SOUTH-EAST ASIA, CANON :

The unprecedented nature of the current crisis makes employee morale-boosting measures an imperative. While I believe that senior management has a vital role to play in motivating staff, it is important to cultivate a corporate culture that permits self-motivation. Canon has put in place measures that are constantly helping our staff to keep a positive attitude. For example, we have incorporated a unique feedback feature in our operations model that allows customers to express their appreciation to our staff for the services rendered. Positive reinforcement like a kind word of praise goes a long way in helping employees to stay motivated.

From TODAY, Succeed
Monday, 30-March-2009

Americans talk to Obama online

First of its kind, as far as I know...

WASHINGTON — Call it Round Two of the news conference, with an Internet twist. United States President Barack Obama took questions from White House press corps on Tuesday in a primetime session that represented the most time-honoured of President-and-reporter interactions.

Last night (11.30pm Singapore time), he took to the same room for another public grilling — this time by regular folks armed with questions submitted via the Internet and in person, as part of a political strategy to engage Americans directly.

"It's a way for the President to do what he enjoys doing out on the road, but saves on gas," press secretary Robert Gibbs told reporters.

Mr Obama used the Web to build a movement that delivered the presidency and raised unheard-of money. Now, he is using the same unfiltered online network and style.

The President has already taken that tactic on the road, spending two days at town hall-style meetings and on Jay Leno's talk show. It offered easier questions and a chance to get his message to the widest audience.

"It is an alternative way to get out the message, in this case on the budget, targeted toward a different audience," said Mr Morley Winograd, a former adviser to Mr Al Gore. AP

From TODAY, World
Friday, 27-March-2009

There’s a new boutique hotel in town

Just in case you would be coming over to Singapore for a holiday or any business trip, or for any reason, and you will need accommodation, why not try Quincy?

Quincy, which is just a stone's throw from the Orchard Road shopping belt, cost $24million to develop and furnish.
Photos courtesy Ong and Ong architects (top) and Far East Organization

From TODAY, Property
Thursday, 26-March-2009

HOSPITALITY INDUSTRY
Despite downturn, hotel enjoyed occupancy rate of 76 per cent last month

Tan Hui Leng
huileng@mediacorp.com.sg

TOURISTS arrivals may be sliding, but Far East Organization sees opportunities even in a recession like this, with the opening of its first boutique hotel, called Quincy.

Boasting a residential atmosphere in a modern setting, Quincy claims to be Singapore's first "all-inclusive" hotel.

Currently, guests can enjoy a limousine transfer service from the airport, three meals a day, Internet connectivity and two articles of clothes laundered, plus not just a free minibar in their rooms, but free evening drinks downstairs. This costs $208 for one guest per room per night. The second guest pays $60 extra for each night.

Quincy's chief operating officer Chia Boon Kuah said boutique hotels around the world have been setting new standards in hospitality and attracting a niche set of travellers looking for something different.

"In terms of demand, it's timely. In terms of supply, it's opportunistic," said Mr Chia. "People remember a boutique hotel experience."

The 108-room Quincy is located at Mount Elizabeth, just a stone's throw from the Orchard Road shopping belt.

Despite the economic slump, it enjoyed a 76-per-cent occupancy rate last month. Occupancy this month has been around 70 per cent.

It may target mostly business travellers, but design-wise, it is young at heart with a façade of dark grey metal, anodized steel and shimmering windows forming large modular shapes. Inside, it has peanut-shaped benches and illuminated torsos. The hotel cost $24 million to develop and furnish.

Apart from the hip, young set, Mr Chia said the hotel has also attracted mature clientele who may be tired of the usual 5-star hotels and who may crave greater intimacy and comfort.

Mr Chia expects to see more business travel spending as more clarity in the current economic situation comes through.

He noted that intra-Asean and intra-Asian travel tend to be segments that traditionally show more resilience in downturns.

At Quincy, the proportion of Asian guests has been growing since the hotel opened its doors on Feb 1.

The Top Ten Mistakes Leaders Make

When I started reading on Hans Finzel’s book The Top Ten Mistakes Leaders Make, I immediately caught some insights and truths, and I couldn’t help to juggle in my mind the organizations and leaders that I know, especially those that I am close with. But the sad truth to all the thoughts that’s racing in my mind, flashing back and forth, is the truth of how far they are from the fundamentals, or, as I believe, truth of what I have just read. Frustration and misery to the max.

I plodded on, and every time I gain a new insight, my mind races back to the same issues and events that I am very sure were a deviation from the standard that was laid out in this book. Or should I say, the leaders that I knew were committing ‘the top ten mistakes leaders make’.

Gladly I have gone through my own share of mistakes, and I have learned, by God’s grace.

Should you be interested in the book, check it out here.

First Post on my Leadership Learning Blog

I have been reading some books, not many, but even with the few books I am able to finish, I am learning a lot. And with this blog, I wish to record much, if not all, of the insights I gain from such exercise – and since beneficial, I intend to continue.

And together with my learning, I will be posting some of my observations and comments in contrast to the reality we find in our organizations we come across with, and how they either apply the precepts and guidelines, or how far they deviate from the recommended rules and styles of leadership.

I know one already: “Consensus is the negation of leadership” – from John Maxwell’s Talent Is Never Enough book.