April 2007 Archives

To all the participants of last Thursday's MBA: Manage Your Business Advant age seminar at the Dusit Hotel Nikko, a big hearty SME thank you on behalf of SME Insight, Intel Microelectronics Philippines and Microsoft Philippines! We hope you had a great time, and that you've learned a thing or two. We enjoye d the day as well, seeing all the bright-eyed managers in the audience! Please stay tuned and keep checking on this site. We promised you soft copies o f key presentations, and we will be posting these here... as soon as we figure the technicals out heheh. In the meantime, do browse around. This is SME Insight's blog page as well, so scroll down to read recent articles, and clic k back regularly for SME-relevant tidbits, news and (of course) insights!

Tomorrow marks the first major SME Insight event for 2007. Manage Your Business Advantage is a seminar/workshop series that' s sponsored by Intel Microelectronics and co-sponsored by Microsoft Philippines . Participants, consisting of owners and top managers from small and medium enter prises, shall be converging on Dusit Hotel Nikko in Makati City for a whole day seminar that will teach them how to find their firms' competitive advantages. We would have loved to invite you, but the event tomorrow is already packed. Es pecially because it's completely free, including food and snacks! But we have another seminar lined up, this time at the Marriott Hotel in Cebu C ity, on May 25. If you happen to be in the area at that time, then do place you r reservation with our events team at events@hip.ph. And more events are to follow, with the next round being in Davao, and then in Cagayan de Oro. And maybe we can have yet another one in Metro Manila before th e year ends. For tomorrow's participants, have fun!

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Vic Icasas

• Vic Icasas Photoshoot - Behind the Scenes
• V ic Icasas Interview

The 5s Program

• 5s program< /a>

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Lorenz Yatco is an entrepreneurial coach. He has lived the lif e of an entrepreneur, and lived others' lives as well vicariously, over the pas t twenty or so years. Now he's made a board game out of it. You can read all about it in the upcoming May-June issue of SME Insight. The board game is called The Entrepreneur. And what makes it interesti ng is that Lorenz has managed to integrate little details about the typical ent repreneur's life into the game. Which is important because, as Lorenz explains, it's not a competitive game but rather an experiential exercise. In other word s, the objective of the game is not really to "win," but to give the players a vicarious feel of what the average entrepreneur goes through. For instance, Lorenz notes that the life of the average entrepreneur revolves a round setting meetings with clients and suppliers and partners in malls and cof fee shops. So the board game reflects that little detail by making the players do their errands in these areas. There's also the bank, which becomes a regular hangout for entrepreneurs as the y struggle to manage their cash flows. And also the little detail about how mob ile phones become indispensable tools for the roving entrep. These, plus other little details, pop up in the board game. I guess what strikes me about The Entrepreneur is that it isn't your t raditional competitive arena, which reflects Lorenz's belief that competition s hould come only after one has mastered the basics. So the game becomes educatio nal not because of the strategy factor, but rather because of the experience fa ctor. So it can be quite useful for high school students who want to get a tast e of the entrep lifestyle. You can read more about the game, and how the entrepreneur's life is reflected out of it, in our upcoming May-June issue of SME Insight, to h it the stands soon!

Also in our upcoming May issue of SME Insight, Dr. Herminia Fa jardo, our columnist who has had several decades of experience in the SME secto r, talks about the critical transition from being a micro enterprise to being a larger, more professional organization. Here's the thing: many entrepreneurs never learn to grow up. Having gotten used to running the details of the company's operations -- micro-managing, poring o ver every person's work, fiddling with the details -- these "baby entreps" even tually end up doing more harm than good as the company grows. Why? Because large companies need to be professionalized. In other words, large companies run because of the trust factor: entrepreneurs have to learn to dele gate the details to their organizations. They have to learn to allow their subo rdinates to do what they think is best to accomplish the objectives that are ha nded down to them, even if their ideas may not exactly be what the entrepreneur had in mind. Or else the company may face an implosion. Such an implosion can happen because (a) these baby entreps can enter a "meddle mode," imposing their opinions even on the tiniest details of the firm's opera tions, with the end result being that employees never learn to become truly aut onomous; and (b) the baby entreps themselves, obsessed with micro management, n ever learn to run the firm from a higher managerial level. Result? The organization never grows up. Because the employees never grow up. B ecause the entrepreneur hasn't learned to grown up. The problem: these baby entreps are characterized by a distrust versus their ow n subordinates. Nothing their subordinates do is ever right by these entreprene urs' minds. And the reason for this is that baby entreps tend to still live in the days when they had absolute control over every little detail of the company ... and therefore got so used to (and probably miss) those glory days. Dr. Fajardo also mentions the phenomenon wherein baby entreps fail to give prop er guidance to their subordinates... and then blame the subordinates whenever w hat they want to happen does not materialize. Sad, yes, but this is an all too common phenomenon. Baby entreps need to acknowledge that it is time to let go of their old roles a s micro managers. Besides, it's for their own good (the stress of trying to ove rsee every little detail of a large company is impossible!). They have to reali ze that as they go up the managerial ladder, they lose control over the little details... in favor of gaining control over the bigger picture. As the entrepre neur becomes a professional manager, his job should become more that of a direc tor, giving directions in broad strokes, rather than using a fine-tipped brush. Failure to acknowledge this can lead to a failure in attaining true growth, esp ecially as the baby entreps end up spending most of their time chasing little v ictories rather than fighting the bigger battle.

In our upcoming May issue of SME Insight, columnist Wilson Ng talks about gut feel versus scientific management. Definitely an interesting to pic! Wilson notes that many business people rely on their gut feel in making de cisions. But where does gut feel come from? Gut feel, hunches, intuition... this actually comes from prior knowledge that p eople do not consciously know that they have. Imagine a machine operator who "knows" when there's something wrong with his ma chine just by listening to the sound of its motor. That kind of knowledge did n ot just happen on the first day in the job. Chances are that the operator must have been running the machine day in and day out for years. Long enough for him to master the nuances of the machine. Same thing with management. Not everyone can rely on gut feel... because not ev eryone will have it. You get a gut feel only from experience and from being a v eteran in the management game. This doesn't mean that a newbie manager won't have gut feel though. Newbies can rely on patterns that they would have accumulated in their lives. For instance, if they loved playing basketball and have played it all their lives, they would probably have accumulated subconscious knowlege about how to read w ho the team players are and who are not. And this kind of reading ends up being applied when they "read" the people in their organization. In short, gut feel comes down to experience. The more experience a person has-- whether on the job or not--the more reliable his or her gut feel would be. But only if the situation matches his or her depth of experience. And when it does, prepare to be amazed. In his bestselling book, Blink, Malcolm Gladwell notes how exp erts "know" things in a split second just by looking at something. They can't e xplain why they know it, but chances are that they are right. And this is becau se they have already accumulated so much knowledge about their field of experti se that their conclusions can just pop out. Perhaps this is the key reason why corporate Boards put a premium on seniority and experience for their members.

What's the difference between a manager and an entrepreneur? Or is there a diff erence at all in the first place? Let's put it this way. Imagine that you have extra capital, and you decide to i nvest in a food franchise business. Are you now an entrepreneur? The bad news is... not really. You are an investor because you've just invested in a business. And if you decide to run the business yourself, then you are no w a manager. But entrepreneur? Sorry, not quite. This is because you did not add any "insigh t" into the business in the first place. There is no innovation, no new idea, n o risk to ride. Oh sure there would be some risk involved, but these would simp ly be the typical risks that are inherent in doing business. Not the risks that come from trying out something totally new. You can now probably infer that entrepreneurship involves creating a new busine ss concept. So in this case, the person who developed the franchise package wou ld be the entrepreneur, and not the guys who are buying into the franchise. So is there any way that a person who is buying into a franchise can be a true entrepreneur? Well, yes. Here are a couple of possibilities: 1. You know that a particular business franchise would actually work i n an area where everybody else claims that it would never work. So your insight here, your contribution if you will, is your possibly knowing something that n obody else knows about the area. So yes, starting a franchise in an area that p eople wouldn't have thought of getting into makes you an entrepreneur to some d egree. But just barely. 2. You tweak or adjust or change the franchise because you know that i t could work even better if only you do this or that. So your insight here, you r contribution if you will, is your possibly knowing something that nobody else knows about the potential of the business. The catch, of course, is that you m ight end up violating the terms of your franchise if you do this. Then again, y ou can do what Ray Krock did (with McDonald's) and buy out the entire franchise concept so that you can make it even better. So what you are probably concluding by now is that entrepreneurship involves in sight. It involves knowing something that not everybody knows, and building a b usiness to prove that you are right.

Based on observations and case studies of CEOs, there seem to be two kinds of e ntrepreneurs, if we can classify them according to how they utilize resources. On one hand are the visionaries. These folks have grand, ambit ious goals. They typically have a very strong idea of what they want to accompl ish. And they generally find ways to make what they want to happen come true. T hink Bill Gates (Microsoft), Sam Walton (Wal-Mart), Pacita Juan (Figaro), and D ennis Mendiola (Chikka). Visionaries tend to have a determination to change the world, or at least their country, in some way. And if they expand their business portfolios, it tends t o be in areas that support or complement their key vision. Thus, Microsoft tend s to focus on operating system-centric products and services, and Chikka tends to gravitate towards mobile software technologies that help Filipinos keep conn ected. Typically, however, visionaries tend to concentrate on just one business or business cluster. In terms of resource management, visionaries tend to be internally-focused -- t hey find ways to take advantage of their resources to further achieve their vis ions. On the other hand, there are the opportunists. These entrepren eurs tend to think not in terms of a grand vision, but in terms of what can be exploited in their environment. They are resourceful and are quick thinkers whe n it comes to manipulating resources and opportunities, and are characterized b y a level of restlessness that make them want to move from one business to anot her. Many small business owners fall under this category, starting everything f rom hair salons to car shops to mini-malls. There is no single vision here. Ins tead, there is a conscious effort to leverage existing resources as much as pos sible. There's still idle space on the property? Start a yoghurt stand here bec ause health consciousness is in! Opportunists may not end up with a huge organization as a legacy, but they will tend to have many small and hopefully flourishing businesses that become their portfolio. There is no grand vision to change the country. Rather, what they h ave is an appetite for challenges and getting a rush out of making new things w ork. Typically, they would work on a new business idea and try to make it take off, but once it does take off they tend to lose interest and move on. In terms of resource management, opportunists tend to be externally-focused -- they find ways to take advantage of their resources to conquer new opportunitie s. Different personalities, different strategies. But they're all entrepreneurs ju st the same.