Against the odds

Some say "Manners maketh the man". Others say "Looks maketh the man". But there is yet a third - "Trials maketh the man". Of course in this day and age, the word 'man' includes woman. And this is the subject of the book "Innovate! How great companies get started in terrible times", written by Thomas A. Meyer.

Meyer makes the point that, as the saying goes, 'in tough times, the tough gets going". In his narrative in this book, he documents how some well-known and enduring companies were actually borne during economic recessions. His narrative goes as far back as 1797 and continues right up to 2008, where the phenomenon described in his book continues. The companies that were borned of adversity  are exceptional companies, and the people who founded them are exceptional people - like Thomas A. Edison, Walt Disney, Milton Hershey, Robert W. Johnson, and Mary Kay, right up to Steve Jobs. Meyer believes that much can be learnt from the experiences of these entrepreneurs. He has helpfully organised the book according to the qualities demonstrated by these people who would not give up easily - qualities such as perseverance (Edison), Pain (Walt Disney), Intuition (Steve Jobs), Simplicity (Robert Johnson), Failure (Hershey), Faith (Mary Kay), Insignificance (Lonnie Johnson of Hasbro), Greed (AIG), Integrity (George Foreman) and of course, Luck (William Procter and James Gamble).

Each narrative is short and simple but effective. He states the lessons to be learnt through a narrative of the underlying story that validates the point. For example he illustrates the power of starting from the bottom with the example of how Robert W. Johnson Jr, the son of one of the founders of Johnson & Johnson, chose to begin his career in his father's company by first working as a mill-hand in its factories. 10 years were to pass before he assumed control of the company as its CEO. Meyer showed how asking for help can move a person's passion forward after a series of failures in the example of Milton S. Hershey, the creator of the Hershey empire. And as they say, this book is chock full of similar examples and lessons.

It is a great book to learn how not to give up when everything seem to be working against you.

Bank Bust

By now, many books have been published on the 2008 Financial Crisis that engulfed almost the entire civilized world. Nobel Laureate Paul Krugman has written about it in "The Return of Depression Economics". Gillian Tett's "Fool's Gold" is another, and Alex Brummer's "The Crunch" is yet another. First published in 2008 and updated in 2009, "The 'Crunch" focuses on the failure of Northern Rock and the crisis that it precipitated for the British financial system. This British-centric focus is different from the many books already written on the financial crisis of 2008, which are more centred on Wall Street and the US. And if this is missing from your mental history of this most momentous event up till now of the 21st century, then you can read it up here. This book does go into details on the people whose actions unwittingly caused the near meltdown of the financial situation in Britain, and this is not referring just to Adam Applegarth, the rogue CEO of Northern Rock who single-handedly almost brought Britain's financial system to its knees. Of course the problem really originated in the US through the uncontrolled sub-prime lending by banks and the subsequent investments in these toxic assets the world over.

This book takes a look into the triumvirate of the Bank of England, the Financial Services Authority and the  Treasury. An invention of Gordon Brown, then Chancellor of the Exchequer, it worked well enough in regulating and managing the financial flows and investments in Britain, which was centred on London. Indeed London succeeded in becoming a major financial centre in the world. While this worked well in good times, it failed to hold up when crisis hit. During the meltdown, these 3 parties descended into a finger-pointing stance, impeding the institution of necessary policies and actions quickly to overcome the run on Northern Rock and shoring up the rest of the banking system. This book makes for fascinating reading, and the chapter on the Central Bankers, which relates the life of key people such as Mervyn King, Governor of the Bank of England,  Ben Bernanke of the Federal Reserve, Jean-Claude Trichet of the European Central Bank, and how each approached the financial crisis makes for absorbing reading.

In the end, hindsight is always perfect, and Brummer concludes the narrative by deconstructing the whole episode from various angles to draw 'painful lesson' from it. A good read.

Intel Inside China

Perhaps to some people, China has now developed into a 7-tonne gorilla, able to push its weight around the world at will. Witness how China is 'buying up Greece'. Certainly China has come a long way since opening up to the world in 1978. Many businesses have rushed into this new 'gold-rush' town, and in the process go themselves burnt or bankrupted. I personally know of one which nearly went under due to its venture in China. Yet there are those which tread carefully and came out the better for it. One of these in Intel.

In "Embedded - Intel in China: The Inside Story", Intel China's once-CEO of 12 years standing, Mr Tan Wee Theng, recounts the careful approach Intel took to establish itself in China. This is not a detailed account of the business operations in China, but a broad sketch of the journey that Intel took going into China. The narrative starts with an explanation of why China was important to Intel, and the gradual establishment of sales offices and the marketing and branding campaigns that followed.

Having tested the waters, more developments followed with the establishment of R&D facilities, and eventually the building of Test and Assembly factories in Shanghai and Chengdu. Intel China's ventures culminated with the building of a wafer fabrication plant in Dalian, China, which is situated in the Northeastern part of the country.

This book highlights the key people who played a significant part in the development of Intel in China. And these people were not just the sales and marketing people, but also people with skills that Intel reckoned were important in doing business in China, including an organisational and cross-cultural specialist who helped to 'integrate Intel's values with the local culture'. This book contains personal reflections of many of the key players mentioned in the book - a feature that makes the narrative that much more interesting.

China is still a very structured society, and this carries over into the business and government arena. There remains specific protocols that one has to observe, such as those that deals with seniority. But one important point that Mr Tan made is to give weight to lower level officials because some of them are likely to rise to the highest levels of government one day.

The author covers issues of 'guanxi', corporate social responsibility, intellectual property and the east-west integration issue, amongst others, but from first hand experience - Intel China's experience. While it may not all be applicable to every company that wants to do business in China - remember that Intel itself is a giant in every sense of the word - the various lessons that are drawn provide good points of reference to one and all. Certainly, students of International Business should read this book.

Harry's Bar

I haven't raced through a book as quickly as this one. No, I didn't just skim over it. I pretty much read it cover to cover. You just must appreciate the tight narrative of the book "The Story of Harry's" by current owner, Mr Mohan Mulani. It is concise yet it has managed to bring out the story of home-grown (i.e. Singapore) jazz bar complete with a narrative of its founding by Mr Jim Gelpi, a Louisiana native expatriate in Singapore, the author's involvement, first as a customer, then an investor and ultimately its sole owner. All of which makes for fascinating reading. The author has even slipped in a chapter on his life before Harry's. This account is to lead up to why and how he eventually ended up giving up much of his original business ventures into developing the Harry's business and brand. After all, by his own admission, he is not familiar with the restaurant and bar business, being more experience and having made his fortune in the trading business (consumer electronics products) and in property and real estate investments. The author draws out an important lesson from the failure of this early part of his business ventures, which is to be honest and to honour one's obligations in business.

Against this backdrop, Mr Mulani then narrates the development of Harry's Bar, which is located in Boat Quay. It is still there. He also writes about the key people whom he relied on in the early years to run the business, and the people who regularly came by after a hard day's work in the central business district just a stone's throw away from its Bar on the banks of the Singapore River, including the infamous Nick Leeson who wrecked Barrings. Just as interestingly he has included brief narratives of the many jazz musicians who have played at Harry's over the years. The book is interspersed with pertinent photographs throughout the book that lends intimacy to the stories. The book even has a discussion of the origin and and development of the Harry's well-known business logo.

Within this fascinating story, Mr Mulani has weaved in material one would expect to find only in business books - building up the Harry's chain of bars and restaurants, brand making while expanding the business, and a look into future ventures. There is even a chapter distilling the business wisdom that he had spent a lifetime learning.

I would recommend this book to anyone looking for a quick but good read. Along the way, you would pick up a gem or two regarding starting and growing a business. But above all, you will get a glimpse into one of the iconic brands in the F&B industry in Singapore.

p.s. If you buy the book, you can claim a free bottle of Harry's Premium Lager upon presentation of the book. Now that's what I call good value for money. This offer is good till April 2011.

New New Things

Chock Full of stories - this is the main impression that you are left with after reading half of the book, Upstarts, by Donna Fenn. This book is about the stories of young entrepreneurs in America, how they saw a need, worked out a solution either on their own, or with friends, or with the social crowd (crowd sourcing), typically on the Internet Forums, and became profitable, some wildly so. So if you are looking for examples and case studies on entrepreneurship, particularly of the younger set, this is a good resource. All the examples in this book are about young entrepreneurs in the US, and their business varied from technology startups to publishing. Ms Fenn has helpfully categorized them into Extreme Collaborators, Technology Mavens, Game Changers, Market Insiders, Brand Builders, Social Capitalists, Workplace Renegades, and Morph Masters. Each chapter in the book discusses these categories of enterpreneurs and cites many examples of actual startup businesses, which Ms Fenn dubs 'Upstarts'.

The many examples are fascinating and each provides a lesson or two about starting a business. However, at about the half way marked (of the book), you can't help feeling a bit tired. The stories, while still interesting, get a bit formulaic. So this is probably a book not for reading cover to cover, but a rich resource of case studies and analyses of the many ways and paths and types of ideas and endeavors that can become springboards for successful businesses. Of course Ms Fenn warns what not all businesses succeed, that probably more companies fail than succeed, but the stories of those that failed is just as important as those that succeed. Keep it for a ready reference source.

Profit with people

Sam Wyly? Never heard of him. Is he related to that famed Warner Brothers cartoon character, Wily E. Coyote? Well, yes, if you consider that both live in Texas. But no, because the first is immensely rich while Wily continues to pursue the Road Runner and gets its head smashed in a desert rock.

Sam Wyly, as I only recently read about, is a serial entrepreneur who started businesses such as University Computing, Sterling Software and took over the running of Bonanza Steakhouse, amongst many successful commercial ventures. The first I have never read about, but I know the second and third businesses. He was a millionaire by the time he was 30 years old. Today, he is 70 something and a billionaire. Now why did he fall under my reading radar all these years, when even his compatriot and friend, Ross Perot, is so much more well known, though not necessarily more wealthy? I really don't know. But I am glad I made his acquaintance through his autobiographical book, "1,000 Dollars and an Idea". I would normally not pick up any book that boasts about getting rich or how to do so. Not that I don't want to but I am realistic. Let's just say it isn't in my genes to become one - financially rich, i.e., though Mr Wyly might disagree. It was those technology companies mentioned in the jacket of the book that interested me.

The book recounts Mr Wyly's rags to riches story, of how he exploited, legally of course, opportunities that came along to enable him to build companies that made lots of money. And doing so with hardly enough money of his own in the bank. Would-be entrepreneurs could learn a thing or two on how he did it. He is a person of his times, when computers (NOT personal computers) were becoming important. Is it any surprise that he cut his teeth with Tom Watson Sr and Jr while working as a salesman in IBM? His story is a fascinating one, as he recounts how he started companies, built them, then sold them, acquired others, sometimes through leveraged buyouts, and accumulated wealth in the process. Of course, he did lose money along the way, lots of it, and he failed to realise some of his ideas, or dreams, but he is sanguine about it. One has to be patient and it will pan out. They did, most of the time, i.e.

One of the things that I took away from this account is the importance of people in your lives, and how it is important to identify them, trust them, get them to work for you, nurture them and share the rewards with them. That is probably one of the keys to his success. The other is the lesson of creative destruction - to know when to quit, when to exit a business. Many hold on to their babies, see them grow up and old, and die.

Not so Mr Wyly's approach. He does not seem to be sentimental about any company he has formed. Instead, he is sentimental about the people who took the journey with him forming these companies. As it turned out, he was right many times and profited from those decisions, some in the nick of time. Some would say he has a good sense of timing. Others would say it is just dumb luck. Whichever way, he made his fortune with an eye for opportunity and, shall I say, a lot of daring.

Debunking Enterpreneurship

The world is in recession right now, deeper than any since the Great Depression of the 1930s, so every conceivable media is reporting. Unemployment has hit record highs, with many people thrown out on the streets because they can no longer pay their mortgages. Many in the US are living no differently from those in 3rd world countries, who call a tent, or a 'house' built from 5 wooden planks stringed loosely together their home. It is heartwrenching, but what can these people do? They can probably do one of three things:

1. Live on government (or any charitable) dole
2. Do odd-jobs (if any are available, i.e.)
3. Start their own business

Starting their own business looks like the best way to 'get up and going' and not wallow in self-pity. And that is really what happens in a recession, or at least when jobs are few and far between. Statistics from the past have shown that this is what the unemployed do. But statistics have also shown that most such businesses (if not all) are bound to fail. Don't ask me, ask Prof Scott Shane, a professor of Entrepreneurial Studies at the Weatherheard School of Management, Case Western Reserve University. He has written the book, "The Illusion of Entrepreneurship", in which he debunks popular myths about Entrepreneurship.

And what are some of these myths?

1. The US isn't one of the most entrepreneurial countries in the world. Countries such as Peru and Uganda are more entrepreneurial (page 28)
   
2. Most entrepreneurs don't select the most profitable industries, but instead pick industries with highest firm failure rates (page 38)
   
3. Psychological factors account for very little of the difference between enterpreneurs and other people...(page 61)
4. ...The typical start-up is very ordinary, not-very-innovative, home-based business that starts and stays tiny (page 76)

Prof Shane goes on to list a total of 67 such 'busted myths and key realities' in this book. And he does not do so with bald assertions, as many who write management books do. In all instances, he appeals to authoritative statistics and studies collected and conducted in the past. The book has 33 pages of notes citing references and authorities. It certainly corrected many perceptions that I have held before. For example, that getting an education will help, not hinder, one's performance as an entrepreneur (myth #50 - page123). The adage to study hard and get a good education continues to hold true. Another important point he made was that public policy towards enterpreneurship (and by extension, schools teaching entrepreneurship) should not blindly support any and all types of start-ups. He asks a question towards the end of the book:

Between a high school dropout entrepreneur who starts a personal cleaning business and a former Microsoft employee of 15 years of experience with an MBA starting an internet company, which is more likely to succeed?

The answer may or may not surprise you, but this question goes to the heart of message of this book - that most enterpreneur fail, but there are some with particular characteristics that will do well. Read the book to find out.

KFC in China

Years ago, as part of a Masters degree course, I read the book, "The Burger King" by Jim McLamore, about the founding and development of the Burger King QSR (Quick Service Restaurant, more popularly known as Fast Food Restaurants) chain store. It was a fascinating story, by any accounts. So a few weeks ago, when I came across the brand new book, "KFC in China", I just had to pick it up to read, if only to compare the experiences of these two giants of the QSR industry. Strangely though I have never picked up the numerous similar books on MacDonalds, arguably the most successful of these QSRs. But there was another thing about this KFC book that drew my attention: China. This promised to be a fresh and potentially unusual and different account of a QSR's development, outside of its domicile. I wasn't disappointed.

"KFC in China" is written by Mr Warren K Liu, Vice President of Business Development at Tricon Greater China until the early 2000s. Tricon was a spin-off of PepsiCo and focused on the food business. KFC, Taco-Bell and Pizza Hut are the better known brands under its wings. In this book, Liu traces the start of KFC in China, in 1987, through the enterprise of the "Taiwan Gang" - seasoned veterans in KFC Taiwan. Surprisingly, they preceded MacDonalds in this venture. In quick succession, he relates the development of the KFC restaurant business in China, going over issues of staffing, business strategy, partnerships with the local Chinese and its government and touching somewhat on issues of corruption.

This book also goes into detail about how KFC in China developed its 'DNA' through the siting of its HQ in Shanghai (rather than Hong Kong, which MacDonalds did), relating its product and marketing strategies, supply chain issues as it expanded, first along the coastal regions of China and subsequently westward into more remote parts of China. As with MacDonalds, KFC also acquired real estate as it established new restaurants. Along the way, Liu makes comparisons with the way the KFC has done things and the (different) way that MacDonald's has approached its business in China. It suggests that KFC's approach is one that suited China more than MacDonalds'. The book then goes on to discuss how the operations in KFC were established, the localization and globablisation issues and headquarter support. It ends with an analysis of the model, Liu suggests, that has brought success to KFC in China - Leadership with Chinese characteristics - and the inevitable speculation of what lies ahead. Liu also suggests and provides an analysis using KFC China's experience how certain modes of operations (e.g. decentralisation, centralisation) suited different stages of development in a Business.

This book can be as dry as any Business Management book on an academic's shelf. One gets the impression that Liu wants to avoid singling out real people for mention in his book. Very often, he leaves out the identity of the person, even though that person, in his account, has contributed significantly to the business. For example, Liu mentions a person who has contributed tremendously to KFC China's development with Joint Venture partners, but declines to identify him by name. This makes the account almost impersonal and gives the feeling that one is reading either an academic theses or a textbook, or both. He did make an exception towards the end of the book when he described in greater detail the work of Sam Su, the head of Tricon Greater China, as well as Roger and Elaine - husband and wife to each other - but working in the same department to illustrate how Sam, and KFC China, dealt with issues of close relatives working together.

Yes, in spite of the general absence of personal references and 'inside' stories, I have enjoyed reading the book. This is because Liu writes in a succinct style, allowing him to cover a wide range of topics in a relatively thin 200-page paperback book. What I especially liked was his summary of the book towards the end. For someone who may have taken a 'start-stop' route while reading the book. it does bring together rather nicely, a reminder of what has been covered.