Conference in December 3-4 (Thurs-Fri )
Queen’s Park Hotel, Bangkok – skytrain: Phrom Phong

How to lose business. The other day I went into a Yamaha music school near where I live. I wanted to rent one of their piano rooms for about an hour a day and, while I was there, enquire about their music appreciation activities for my young son.

The place was deserted except for the receptionist. She didn’t know anything about room rentals, so she called the owner. After a long discussion, she came back with the price: 300 baht per hour! I was a bit surprised. I only pay 30 baht an hour at a music school in Sukhumvit. After another phone call, she came back saying that she will accept 200 baht. I tried to explain that I wanted to rent a room regularly, so could she give me a monthly price? Still 200 baht/hour. Well, maybe it’s a really good, concert grand piano… So I asked to look at the room. It was the tiniest room imaginable with an almost toneless piano.

I said no thanks and didn’t even bother to ask about the music classes. I’ll never be going back there again…

I couldn’t help wondering… the school was deserted, so it would cost nothing but a few baht for the air-conditioning to let me use the facilities. The problem that most schools, restaurants, internet cafés and similar businesses have is to get customer traffic. Surely, one satisfied customer – even if he doesn’t buy much – is better than no customers at all? Customers bring customers, and eventually a growth in business.

I had a similar experience with Cabbages & Condoms. I recommend this restaurant highly – not only is the food and ambience really good, it’s part of the PDA and supports its community development efforts.

I was president of a Toastmasters club. We wanted to use one of their private rooms on a quiet evening for about three hours twice a month. There was no charge to use the room, we were just a large party of people coming to eat at the restaurant. Rather than order a buffet at 600 baht per person, we simply ordered a variety of items from the a la carte menu. We spent just over 300 baht pax as a result. It suits most people’s budget and the club blossomed.

But after a few months, the manager of the restaurant approached me, saying that we weren’t spending enough and if we wanted to continue to use the room, we had to order the buffet service.

We tried to negotiate, but in the end we stopped coming to the restaurant and found another venue.

A lot of business was lost. Not only did we bring new customers regularly to the restaurant when business was quiet (we were often the only people there), we also organized inter-club conferences, sometimes bringing 200 people at a time. Cabbages & Condoms was our home. It was ideal for all concerned. And many people who had never heard of the restaurant discovered that it was a great place for their own parties and for inviting their friends for an evening out. All of this disappeared when we left.

Compare this with the Elefin Café. A friend of mine invited me to a small dinner party there. It’s a beautiful wood & glass construction with comfy chairs, fresh coffee beans roasting on the premises and an internet café on the first floor. The food and ambience was excellent and reasonably priced. We had a small private room. I decided to try out the room as a venue for my smaller workshops.

Business multiplied. For six weeks, every Monday, eight people spent the lunch period at the restaurant. We didn’t spend a huge amount (considering that the set lunch only costs 120 baht), but we did also buy coffees and drinks and snacks while we there. And each person subsequently came to visit on other occasions and brought their own friends. One night, there was a birthday party for 12 people.

The experience was so wonderful that the Elefin Café is now my home for small workshops and various meetings. It will also be the home of the Bangkok Debaters Club that I will be launching soon. I will be bringing a lot of business. And many of my guests will bring in further business. It will soon become a busy and popular venue.

All because of one satisfied customer.

The same goes for Thai Language Solutions. I’ve been a satisfied student there for several months now. I actively recommend this school to my friends and customers who attend my Read Thai workshops or purchase my e-book Read Thai in a Day.

I even met a few people who had paid for a year’s lessons at Thai Walen language school, but became so frustrated with the bad service that they chose to pay all over again to go to Thai Language Solutions.

Thai Walen is a fairly successful and aggressively market language school, so they have no trouble in getting new customers who don’t know any better. But the visa department is already wondering why so many Walen students are getting their education visas re-registered to another school.

Many schools (as most businesses) depend on new intake through word-of-mouth recommendations. And nowadays, with so many internet forums, it’s easy even for people who don’t know anybody in the region to get advice about where to go, based on previous customer experiences.

Look after your customers, especially the dissatisfied ones. You don’t know how many friends they have.

Well, we do, actually. Studies have shown that the rule of thumb is as follows: each satisfied customer usually tells about 4 of his friends and colleagues, who tell a total of 2 other people on average.  A dissatisfied customer will tell around 8 people, who will pass on the story to another 8 people in total.

The cost of a dissatisfied customer due to lost business opportunities is staggering.

Please join us at the Understanding Consumer Psychology conference to learn more about how to harness customer power to grow your business.

Click here for more details.

Conference in December 3-4 (Thurs-Fri )
Queen’s Park Hotel, Bangkok – skytrain: Phrom Phong

If you are a foreign company or director doing business in Thailand
– or if you intend to establish a presence in Thailand –
then this conference is for you.

More details about the conference here. And to understand the value-for-money you will receive from this conference, please read the last section below.

What do you think of when you think of Honda? I had a Honda Civic once. It was my favorite car, fast, nippy, responsive handling… and always reliable. But since I heard of the troubles that K Duenpen had with her Honda (the woman who hammered her car to bits in Bangkok) plus the woman in Chiang Mai who’s Honda had to go in for major repairs five times in eleven months – I’ve decided that my next car will be a Toyota.

Polls by Forum and Gibbons (in the USA) show that the main reason why customers switch to a competing business is because they don’t like doing business with the company (70%). Only 15% say they switched because of a better price. And 15% said they switched because of technical quality. Nevertheless, basic reliability and overall value for money counts a lot too.

When it comes to quality and after-sales service, I had similar experiences with Sony. I’ve bought four Viao computers over the last seven years and each time I had problems. Viaos are sleek and stylish, but it takes Sony two months to repair even minor faults. I need my computer every day, I can’t afford to be without it for more than two or three days. The last time my Viao broke down, I lost so much money from not being able to work effectively that it would have been cheaper to throw the computer away and buy two new ones, one to work on and one for emergency back.

That’s what I did in the end. I bought a cheap Acer and when the Viao broke down again, I just threw it away!

Now, Acer has a great two-day repair service. But, last year, my Acer began to fall apart at the edges: a key broke off, the touchpad is faulty, it overheats and shuts down regularly, there’s a small mark on the screen, the battery runs out after 2 minutes… I could get it repaired fairly quickly, but it’s a hassle. I haven’t been able to find two or three days when I can take it in for repair.

It turned out to be more convenient simply to buy another computer. I bought an HP Compaq this time. I’m using it to write this article. And it’s probably the best computer I’ve had… ever. I’ve had it for nearly a year now. It’s also sleek and stylish… not quite like the Viao, but it has been so reliable: no breakdowns, everything still working, the battery still lasts several hours, etc. etc.

I am a typical consumer. I like to buy things. I buy digital cameras and video recorders, computers and printers, video players, TVs, clothes, furniture, fridges, books, DVDs, mobile phones, MP3 players and other gadgets, souvenirs, gifts… I go out to watch movies, eat out at restaurants, stay at resorts, etc. The list is endless.

And I have learnt which are the brands to avoid – I no longer buy anything made by SKG, or Sony computers. I don’t buy products from Watsons. I’ve been stung enough times to avoid buying from eBay. No more ‘no name’ brands, even if they seem like bargains. My last MP3 player/phone was a cheap LG, but it was so awkward to save and listen to music that I don’t use it for music at all – the very reason why I bought it. I went out and bought a simple Nokia instead, just to use as a phone; forget the music… My next purchase will be an iPod, the one made by Apple!

I tell all my friends and colleagues to avoid the brands that I’ve had problems with. And I recommend brands that worked for me. I had an Israeli friend stay with me last month and on my recommendation, he bought an HP Compaq to take home with him. He was so impressed that he bought a second one for his brother!

Multiply my experiences by several thousands (or millions) of people, and you get a kind of ‘consumer intelligence’ that can either make your company super successful, or just mediocre. Sony lost a great deal of its market share to Acer as a result of its poor after-sales service, but it’s a rich company with slick marketing, so what do they care? Well, maybe they should… my partners in the UK started out buying Vaios for each of the 20+ travelling sales executives, but after having bought three units, we decided to switch to other brands that were more reliable and cost 1/3 of the price. We simply weren’t getting the value we were paying for.

Are your customers happy with the reliability of your product or service? And how do you know?

In the conference Understanding Consumer Psychology, we will discuss several approaches that connect product design with customer service & after-sales support and customer loyalty. It’s not just repeat business that brings you success, it’s the enthusiasm of your customers that brings in new customers and helps to expand your business.

And everything is connected. Good Corporate Responsibility means taking care of your staff, which means they look after your customers and take care of your business. And ensuring that you deliver on your “marketing promise” means that customers trust you to give them the best overall deal possible.

Once customers start to realize that the overall cost of your product or service is actually cheaper than the cheap ‘n nasty products offered by the competition, your company will become more profitable, even if you don’t have a larger market share than your competitors.

It will be this kind of thinking we will be helping you to develop in the conference.

Please come and contribute your questions, problems and ideas with other like-minded business owners and directors.

Even if you take back – and implement – one good idea from the conference, you are likely to see a return of possibly millions of baht (depending of course on the scale of your business).

Click here for more details about the conference.

So what value do you get out of this conference?

Well firstly, to hold a two-day conference in-house with just one seminar leader would cost 200,000 baht. We have four!

Secondly, we all have on-the-ground, practical expertise of establishing and operating businesses in Thailand. We’ve made many of the mistakes that you are about to make, or have probably made already if you’ve been here a while.

Thirdly, we don’t talk about general blue-sky, total quality, leadership laws and other theoretical principles. We will be discussing real, practical solutions that you can implement relatively easily to obtain dramatic results.

Finally, this is a conference of other like-minded decision makers, each bringing their own experience and expertise to the table. We will be tackling difficult issues that do not have simple one-size-fits-all solutions. We don’t have all the answers. Our panel has been grappling with these issues for years, and we are still looking for more effective ways to grow profitable and sustainable businesses. Your contribution counts too. And so do your problems and questions.

You can’t get that even if you hire in an international expert or two to provide consultancy to your leadership team, whatever the cost.

Two days of your time and 28,000 baht is good value. You will get back many times more than that if you implement one or more of the approaches we discuss during the conference. Our marketing promise to you is that we will make sure of that. Our reputation and future profitability depends on keeping our promises too!

Each member of our team will continue to assist you in developing and implementing these principles further in your organization. This is not just a conference. It’s a beginning. We want to help you grow successfully. After all, our success depends on your success. We’re hoping that you will subsequently engage us as practical consultants in helping you to develop your business.

As Stephen Covey advises in the 7 Habits of Highly Effective People: Think Win/Win.

Click here for more details about the conference.

But it is a wakeup call.

This financial crisis is not new and has been expected for a while…Some have been issuing warnings since around 2002 (but were ignored as alarmists). By mid 2007, it was already fairly obvious that a global crash was imminent. So why does it come as a surprise to governments, businesses and ordinary people who are now either losing their jobs or having to cut back?

Yet there seems to be little good reason to slow down business activity, at least in Japan. The Yen is the strongest it’s even been and has been gradually getting stronger and stronger over the decades. Surely, there is a huge opportunity there? There is no need for such sensationalist gloom and doom-mongering. The sophisticated infrastructures are still intact and work efficiently. We still have electricity and gas and water. Trains and buses still run on time. There is still a relatively plentiful supply of food. Property values may have crashed but the buildings are still standing and in good condition. Schools and hospitals and libraries and government offices are still open. And television stations continue to churn out news, movies and entertainment. In short, the world is still turning!

In this article I will present an approach that may allow you to exploit the many opportunities that have arisen as a result of the current financial turmoil.

How did we it get into such a mess in the first place? I believe that, despite the unprecedented access to information, most of us have been trained to live lives of studied ignorance, as in previous ages when people were mostly illiterate or uneducated. In some ways, we haven’t advanced all that much. Just because you might be highly “educated” doesn’t make you impervious to this affliction. Indeed, some of the most ignorant people are highly qualified doctors, bankers, professors – primarily because they are so confident of their knowledge and seldom question it.

Schools teach us to accept facts on authority. We are discouraged from thinking skeptically, particularly about the process of learning itself, and the purpose of school education – which is ultimately so that we can go to university to be ‘qualified’ and get a ‘good job’.

Educators will argue against this. But think about it…. As a student, if you felt there was an alternative explanation for an historical event, say, you would be marked down if you expressed this point of view in the exam. So instead you simply learnt the point of view that was “correct” for examination purposes. Similarly, were you ever given the opportunity to discuss what you want to learn in the first place? If you studied mathematics, would you have been allowed to learn about investment and finance, or fun stuff like topology or game theory? And if you studied history, would you have been allowed to study Asian History or the History of Science, as opposed to whatever was the standard syllabus (American & European History?)

Only a very few schools rate students on their ability to present an argument, based on good quality research and critical thinking. In general, the quality of even post-doctoral research and analysis is appalling. A typical case in point is the recent debacle regarding Olanzapine.

We are being lied to consistently by the very people who are supposed to safeguard our interests. It suits them that the majority of the population accepts their “explanations” for how the economy works and about taxes, health, education, warmongering, and even the state of the environment.

Henry Ford said a hundred years ago that if people really understood the financial system there would be a revolution. Not much has changed since then.

Most of what we know and believe has been carefully conditioned over the years. We are almost as indoctrinated to believe in our Capitalist, Consumer way of life (whether Japanese or Western) as the Soviet or Chinese children were made to believe in the merits of Communism and the socialist way of life.

This perhaps hasn’t been planned deliberately. I doubt there is a secret society of wealthy and influential families conspiring together to make it so. Usually, these things come about simply because it becomes fashionable. It was fashionable for quite a long time to believe that women were mentally inferior to men and were biologically designed to stay at home and look after the family. It was fashionable amongst eminent doctors to believe that blood-letting was healthy or that anesthetists were quacks. It wasn’t so long ago that knowledgeable professionals advocated for eugenics as a means of purifying the human race. And up until the 1970’s doctors were fairly convinced that masturbation was unhealthy. More recently, most of us were willing to believe in the effectiveness of powerful psychoactive drugs for dealing with discipline and behavioral problems in young children… Doctors, lawyers and politicians in the UK also readily accepted that women could harm or murder their babies as a way of drawing attention to themselves (MSBP or Munchausen’s Syndrome By Proxy is what it is still called). And insurance companies in the US readily fork out millions of dollars for treatments identified by the DSM (Diagnostic & Statistical Manual) published by the Psychiatric Association. Yet it isn’t based on scientific principles at all. And despite this, people who are diagnosed as having a personality disorder under the DSM are routinely considered sufficiently dangerous or incompetent by family courts to have their children taken away.

Judges do not question the underlying validity of the DSM or the professionalism of the practitioners involved.

You are a highly skilled and experienced professional. Do you think, however, that you are immune to this kind of ignorance? For myself, despite being on my guard for attempts to hoodwink or indoctrinate me, I am often astounded at the depths to which I have been deceived. It very often goes to the core of our value systems. Our “Capitalist” lifestyles probably depend to a great extent on the wholesale squandering of fossil fuels. We value convenience and choice and “freedom” and material comfort. Personally, I would find it extremely difficult to live the life of a Buddhist monk, only eating before 11am and entirely dependent on others for my food. Yet, approximately 90% of the people in the world live lives not so different (but perhaps without the “spiritual” nourishment that the monks have).

The very basis of our financial systems seems to be based on a gigantic pyramid scheme – albeit very sophisticated. Like most MLM businesses, the successful people are those higher up the pyramid – those who get in early and quit while they are ahead. But this kind of system only works if the 90% at the bottom of the pyramid supports the 10% at the top. If you look at the mathematics, pyramid schemes become saturated very very quickly.

In my humble opinion, the boom and bust economic cycles of the 20th century are a direct result of the pyramid principle in action. Just on a larger – and now global – scale.

Take the recent property crash in America. The only way that a property can increase in value if someone else down the line buys it at a higher price. The only reason why he would do so is because he believes that he can sell it to the next man for an even higher price. But when you reach saturation point, the people at the bottom of the pyramid can no longer find anyone left to buy into the scheme.

Banks and financial institutions depend on the expansion of the pyramid in order to justify their existence. Finance 101: a bank borrows money from you, the depositor, at X% interest and lends it out to someone else at X+y% interest. If they have no-one to lend to then they can’t pay you your interest. So banks tend to find creative ways to lend to people who simply cannot afford to borrow. This works so long as the properties they buy continue to increase in value.

When this is no longer sustainable, the people at the very bottom are saddled with loans secured on properties that are worth less than the original loan. So they have to make up the difference out of their own pockets! And, ultimately, it is these poorer people who support the entire financial structure by spending the next 10 years of their lives paying off their debts – either directly by negotiating a repayment schedule or indirectly by increased taxation and an increase in the cost of living.

Where do governments find the $800 billion or so to rescue the banks and bolster the economy? Either by printing money (which therefore means that it becomes worth less over time) or by borrowing from the people (which gets paid back through sustained high levels of taxation).

It can make one feel cynical that so much money can be magicked up when one hears that nine million children live in refugee camps at any one time; or that around the same number die every year from treatable conditions such as malnutrition or malaria and that it would take around $18 billion (or the cost of four aircraft carriers) to prevent most of these deaths. Perhaps there is an unstated accord to indulge in a form of ‘natural’ population control (after all, 9m extra poor people in the world every year might simply exacerbate the poverty problem); or perhaps the livelihoods of the people dependent on the aircraft carrier construction industry has higher priority than a few million poor children who have no future anyway… It does seem grossly unfair, however, that money can be found when it’s expedient, but obtaining comparatively small amounts of money is often problematic.

I’m not a finance expert, so I may have got some of the details wrong. (Please comment below if you can support or refute this notion.) I do believe, however, that most of us are fairly ignorant about what really happens behind the scenes and how it affects our work, our incomes and the cost of living.

My guess is that the underlying reason why governments and big businesses often get it so wrong is these institutions operate on the basis of “it’s other people’s money”. At the end of the day, it doesn’t really matter if the money is wasted. After all, the worst that can happen is you lose your job; and for a CEO this isn’t always such a bad thing if there is a golden parachute involved. For a politician or senior civil servant, either the departmental budget is reduced (or simply not increased!) or the person responsible (or his scapegoat) gets pushed sideways.

There is really no strong incentive to deliberately and thoroughly think through the repercussions of any particular plan. A simple process that might help would be to work through a particular proposal using Edward de Bono’s Six Thinking Hats framework. But hardly anyone knows about it (and very rarely in the public sector), let alone makes use of it as a matter of course.

As ordinary people we don’t question the fundamentals of business practices, trading and investments, and the economy in general. Even if our job involves finance or budgeting or accounting or planning. Indeed, we are deliberately discouraged from doing so, usually through confusion or omission of information. The aim is to maintain “confidence”. We seem to understand that so long as everyone else feels confident then the global monetary and banking systems won’t collapse and we can keep our jobs, borrow money, and buy things. No one wants a run on the bank, even if we know that there isn’t enough money in the bank, because then everybody suffers. And there’s nowhere else to keep our money anyway, other than keeping cash or buying gold perhaps.

And even this is fraught with difficulties. What kind of cash should we keep? Yen? Dollars? Euro? Baht? The value of any of these currencies fluctuates so wildly that it is impossible to know which is a “safe” currency. A hundred years ago, one British pound could buy you $100 worth of goods. Now you get only $1.50. For many years the South African Rand was worth more than a dollar. Now it’s only worth 10 cents! And in the early 70’s, $1 bought you around ¥350. Now you only get ¥90 to the dollar.

And what about gold? Sometimes it’s worth a lot: it was $850 (per ounce) at one point in 1980; but mostly it’s been around the $400 mark. Some people say it could eventually reach $2,000. $800 in 1980 is worth $2,000 in real terms today. So gold should already be at this level if it had kept its value.

As for full-time employment, jobs are not as secure as thousands of people are (re) discovering. The more flexible and entrepreneurial self-employed consultant, contractor or businessman is in a better position to weather economic downturns. Primarily because they are practiced at responding to market conditions. Permanently-employed people are in very shaky positions – their jobs can be terminated in an instant: when there is (yet another) financial crisis, when the CEO makes a blunder, or if the company becomes bankrupt, is sold/merged, or simply transferred to a new country. They do not have basic skills to think creatively, to sell themselves, to read the market or to ask the right questions. Most employees work in a world that seems to be stable and secure; and they have no idea how their work affects the overall wellbeing of the company; or how external forces shape their futures. Very few employees actually understand the Big Picture of how the company operates and how the quality of their work or actions affects the profitability and sustainability of the company. Our modern day corporate companies are not so different from a Ford production line of 100 years ago, other than the fact that today’s products are more “knowledge” based.

It is perhaps a little facetious to over generalize. Many things have improved beyond measure since 100 or even 50 years ago. We live in a truly magic age of instance communication, cheap and abundant food, flying carpets that can whiz us across the globe in a day (it took the Mayflower two months to cross the Atlantic) and automated systems that make life extraordinarily convenient.

But many things have also stayed the same. We are all remarkable creatures of habit; and we seldom learn from our experiences, good or bad. It’s only when something really bad happens that people sit up and notice. But in time, we forget. It was just twelve years ago that we had a spectacular meltdown in Asia. Are our business practices and personal habits any different now as a result of that? Probably not. Seven years before that there was a fairly serious downturn in the US. Three years before that the property bubble burst in the UK. And in 2002 there was a dotcom crash.

There are lessons to be learnt from all these crises. Governments, banking and financial institutions have sometimes implemented measures that protect our wealth, but on the whole the measures seem to have been sticking plasters that unravel again a few years later. Sufficient to maintain the illusion of “confidence” until the next time and perpetually delay any really serious meltdown… We hope.

Some say that this time it will be different. Our way of doing business and managing the economy is inherently unsustainable. Maybe there will be a return to the Gold Standard, and the true (lack of) value of currencies such as the dollar will be exposed. It may take 5-7 years for all of this to unravel and, along with other self-defeating habits, the downturn will be a lot deeper and a lot longer. Whether this comes to pass or not, only time will tell.

It does seem tomake sense that in a global economy, there should be a single universal currency. The individual states of America manage with a single currency, and so now do the European member states.

Now is a good time for reflection and fundamental restructuring and development for the future. It is a golden opportunity to harness the wealth of knowledge, talent and expertise already existing in your organization. People are not so busy selling and fulfilling orders. Now that it is quiet, you can use this time to develop your people (who already have an innate knowledge of your product, the industry and your corporate culture) and work on new products and strategies in preparation for the future.

Letting otherwise productive staff go has a double cost. The first is that it costs 2-3 years’ salary to recruit and train a replacement in terms of fees, delays, errors and lost opportunities. And the message you send to otherwise loyal staff members is that their jobs are not as secure as they thought; which means they will be more amenable to transfer out to another company if the opportunity presents itself. If I were a headhunter, I would look for likely candidates by deliberately targeting those companies that had let go the most people during this crisis.

Instead of cutting back, companies should use this opportunity to invest. Many people find this concept difficult to grasp. Saving a million dollars on cutting costs and laying off of staff seems better than investing the same amount on exploiting new opportunities. In the short term, you may save a million dollars. But think of what is likely to happen in the medium to long term.

An economic crisis is, however, the ideal excuse to get rid of useless or negative people. Many employees do become entrenched in corporate life and are no longer productive, but it is often difficult to get rid of them without a significant reason. Bad managers should also be removed while you have the opportunity – those who block progress and treat their subordinates like serfs. Particularly those who “do” rather than “manage”.

That aside, it is unfair and bad business practice to lay off otherwise talented staff during this time. It’s a sign that the business has been operating on an unsustainable basis. Intimate knowledge of the corporate culture, clients, business practices & procedures, trade secrets are being leaked to savvy competitors (those who take up the slack quicker when the economy improves)…

Much better, then, to keep them on for those 2-3 years and develop them so that they become more productive (by value) in the future. Most accounting and trading practices don’t allow for this kind of long-term internal investment of human capital. It takes strong leadership to take this kind of action and to persuade investors that this is better for them in the long term. Most traders and trading systems only look at trends in the figures, without really looking at the fundamentals of the business model and the strength of the corporate infrastructure.

Except for people like Warren Buffet of course.

Besides, with the Yen being particularly strong compared with the dollar, pound, euro and wan, it is relatively cheap to employ American, European or Korean labor, so long as you can retain them in their home country.

Here are some additional approaches you might want to consider as a strategy for dealing with the crisis:

  • Invest in intellectual capital
  • Care for your staff
    • Staff are unlikely to move on to higher paid jobs(the competition?) if the environment is pleasant, they have a social network and support for their family, get on with their superiors and colleagues and have a career path that suits their personal goals (which may be no path at all, but just enjoying their work day…)
    • Eliminate bullying
    • Encourage leaders to praise and appreciate subordinates
    • Remove bad managers – allow “stars” to excel at their expertise without necessarily gaining status through management. Teach managers to manage (vision, delegate, coach) not work as hands-on experts.
  • Encourage entrepreneurship, independent consultancy positions particularly for part-time/contract staff), develop a business mindset.
    • Encourage creative and critical thinking
    • Overcome barriers to providing honest feedback
    • Make it safe for whistle-blowers
  • Implement Six Thinking Hats in all your meetings.
  • ·Foster creative ideas
    • Test the best ideas – pilot studies, mini start-upventures, etc.
    • Implement the ideas that work
  • Understand customer care, and how it impacts on every aspect of the organization
    • Product promise
    • Customer service
    • After sales support (and guarantees)
    • Encourage and reward complaints – feed back into product development/customer service/operating procedures
    • Staff and suppliers are customers too
  • Learn to work “smart” not busy.
    • Are there superfluous activities in your organization that can be dispensed with?
    • Is it really necessary to have people working 8-10-12 hours a day? Maybe they can do the work in 4 hours and spend the rest of the time either spending time just thinking, or with their colleagues or their customers, learning from each other and strengthening relationships,or have more time with their family, or spending time learning & improving themselves. (Most people only do 4 hours productive work per day anyway; they just look busy for the other 4+ hours!)
  • Apply the Seven Habits

If you’ve gotten this far then you are probably fairly serious about your business and would like to consider various avenues to take advantage of the current economic climate.

Please contact me if you’d like to have a discussion about it. I am happy to visit you at your convenience.

I’ll be in Japan until Jan 14, 2009 and after that in Bangkok.

Data Security

This may seem a dry subject – like insurance – but data security is an issue that should be dealt with as a matter of priority.

It can cost days, if not months, of work if data is lost and you have no backup. It can happen in so many ways. Inadvertently deleting that important folder when your mind is elsewhere. A freak bug in a software application. A power surge ruining your hard drive. A drink spilled over your notebook. Or simply a hard drive failure or corruption of data.

Most of the time nowadays, computers are extremely reliable. Deleted files can usually be recovered from the Recycle Bin. Data from a hard drive can often be retrieved.

However, it does occasionally happen that important data is lost. Even in a minor case, it can be very expensive or time-consuming to recover the data. In some cases, can be devastating for your business. Particularly if a notebook is lost or stolen and someone else gets access to your data.

Here’s what has happened to me, despite occasionally backing up my data. I had transferred several days’ worth of photographs to my computer and began the work of retouching them. I decided to create a separate catalog file in Adobe Photoshop. I happened to give it the same name as the folder the photos were in and, due to an obscure bug in the software, all the photos were wiped out. Not deleted and stored temporarily in the recycle bin, but completely wiped clean! I spent the next few hours using data recovery software to try to locate the files on the drive, but to no avail. Only the last few photos were still on the camera’s data card, but hundreds of photos were gone. I hadn’t got round to making a backup since the previous week, so I had no backup either. I had spent the last six days solid, travelling all around the city to take these photos. I would have to do that all over again!

Of course, if they had happened to be pictures of a recent wedding or corporate event then this could mean disaster.

I have a friend whose disk failed. He has about three year’s worth of personal photos, videos and other data, which he lost. He also had all the material for the publication of a monthly magazine. Despite it being not a total disaster, it has cost him dearly.

He was able to recover some data from an old archive drive. The last time he backed up was about two years ago. And he managed to rewrite the magazine and only lost two weeks. He lost another week, trying simply to recover the data and it turns out that if he is prepared to spend about $1,000 then some of the data might be recoverable by opening the disk in a clean room.

On another occasion, I inadvertently spilled a glass of water over the keyboard of my notebook. The repair shop told me that it was ‘uneconomical to repair’ so I retrieved the hard drive from the damaged computer and bought a new notebook.

Only to find that when I attached the drive to the new computer, the data wasn’t readable. You see, I had used the encryption feature in Windows to keep sensitive information secure from prying eyes. Unfortunately, Windows encryption is locked to a specific computer and I hadn’t been aware of the need to backup the various keys that would allow me to access the data on another computer.

Never mind, I had made backups of all my documents onto an external hard drive. So I would only lose a couple of days’ work.

The trouble was that I had used the encryption feature on the external backup drive also. And Windows wouldn’t allow me to access the data here either. My last unencrypted backup was made three months previously! I spent the next two weeks on the phone to Microsoft and various data recovery specialists to try to get my data back.

It was useless. Three month’s work down the drain – and, even worse, three month’s worth of correspondence, which I had kept in Outlook, gone for good.

Of course I had to move on and make do with the odd printout I had. Luckily, I had emailed some work-in-progress to various clients and colleagues, so I was able to recover some of the work that I had done. But the next month or so was spent basically re-doing the work that had been lost.

I did manage to recover the data in the end. I bought a second-hand computer, the identical make and model to the one that had got damaged, and inserted the old hard drive. Voilá! I was able to boot up using the old Windows configuration and access the encrypted data.

However, I now had several versions of data on different drives and folders that I didn’t get round to tidying up for another six months.

Yet, no matter how careful or dilligent one is about data security, losses still inadvertently occur.


So this is what I’ve learnt.

  1. The first and most important is to subscribe to an online backup service where your data is automatically and transparently backed up, without any intervention on your part. I use Carbonite because, despite its limitations in providing feedback on its operations, it backs up every file continuously, almost as soon as it has been modified. As I have an always-on broadband connection, this means that my backups are securely encrypted and always up to date. It also integrates nicely with Windows Explorer and allows me to back up all sorts of obscure system files or files stored in application folders. And it only costs $50 p.a.

    (Update: in some ways, this service is perhaps too simple, because it is difficult to know what it’s doing.)Other similar online backup services include iDrive (the first 2GB free) and Mozy. It is worth looking at these too, but whichever one you choose, ensure that your data is being backed up transparently and continuously.

    Relying on CDs or DVDs or external drives is risky because one inevitably makes these back ups intermittently, usually every few days or perhaps even only once a week. This could mean days worth of work being lost, even if you do back up.

  2. Encrypt your hard drive. Especially if you have a notebook. There is so much personal and valuable commercial information on a hard drive that if it gets into the wrong hands, it could ruin you.There are several systems around. I used to use the built-in Windows encryption file system (EFS), but didn’t realise that it is not meant to encrypt external drives either, and gets locked to your computer hardware – even if your data drive is intact! The lesson is to use a third-party system instead, costing around $50-$100. Encrypted Magic Folders is quite good, but perhaps a bit dated now. Others include HandyCrypto and TrueCrypt (which is free). Here is an excellent resource for on-the-fly encryption software: make sure you have some way of keeping your passwords safe. There’s no point in locking your front door, if you hang the key on a hook on the doorpost!

Data security is cheap and effective. Do it now while before it slips from your mind. Or face the inevitable consequences of the loss of work-in-progress or your privacy.

It costs only around $100 to secure your data. If you consider how much even a day’s work is worth to you, the price is negligable.

What does it mean to be an entrepreneur? The archetypal entrepreneur is an inventor working out of his garage. No so. Although entrepreneurship depends on innovative thinking, it needn’t be (and seldom is) based on a technological breakthrough. It is primarily a business discipline that small and large enterprises must embrace in order to maintain a competitive advantage.

Entrepreneurship is good management. The larger, established company is better able to adopt entrepeneurial policies, primarily because it has typically already cracked vital management issues. Nevertheless, a smaller enterprise (including the ‘self-employed’ professional or consultant) can benefit from incorporating an entrepreneurial approach.

By one definition, anyone who doesn’t draw a salary and who works independently is an entrepreneur. That makes most of the street vendors and bargirls in Thailand entrepreneurs, along with Richard Branson, Michael Dell and Oprah Winfrey.

I prefer a more workable definition: 1) the business provides an innovative product or service; 2) you have an exit strategy.

An important aspect of an entrepreneurial business is to develop and implement a number of management disciplines.

  • The first is to determine what is the true value that you provide to the customer. Not what you value, or what you think they value, but what they actually value. Very often it will be different from what you think, so it’s a good idea to go and talk to your customers in a systematic way in order to find out.
  • Define systematic business processes so that most or all of the business can operate without you. At the very least it frees you up to focus on improving and growing your business. It also improves communication – enabling staff or sub-contractors to understand the business and run various aspects of the business independently.
  • This then makes it possible to set standards and provide training based on the work to be done. Training is often wasted by not having a clear idea of its purpose. A description of the necessary processes makes it easier to develop an effective training programme.

An innovation in providing value is where entrepreneurs and professionals alike can gain a considerable advantage. A financial advisor may assume that his customers value investment tips and ways of increasing their wealth. But many customers have no interest at all in investing or becoming wealthy; they simply want peace of mind. An infallible scheme to maintain a client’s standard of living satisfies the desired ‘value’ here.

An innovation could be as simple as the accountant that also acts as a personal assistant for small businesses.

In Thailand, one can often find dozens of fruit vendors all vying to sell identical produce. A competitive innovation based on customer value might be simply to set up a juicing service nearby.

What do tourists value most? Is it the quality of breakfast, or the pampering of attentive staff? Unless they intend to hang around the hotel, it’s likely to be information about where to go, where to find things and how to get there. An innovative service might be to provide comprehensive tourist information & coordination. A small hotel could effectively compete against many larger hotels in this way.

According to Peter Drucker (Innovation & Entrepreneurship), there are three main entrepreneurial strategies that a business can adopt.

The riskiest – yet popularly associated with a successful venture – is to aim for a permanent leadership position. It requires a precise targeting of the market, a massive market presence and an ongoing effort to sustain a leadership position. Only for the likes of 3M, Johnson & Johnson or DuPont… Apple or Sony may have started with a different entrepreneurial strategy, but now it is undoubtedly to retain leadership. Their ‘Value Discipline’ (Wiersama & Treacy) is Product Excellence and their target market is primarily those who want the best regardless of price.

Another strategy is to target the untapped market. It doesn’t necessarily have to involve a technological advance. Edward de Bono (in Sur/Petition) identifies a number of ways to exploit or combine existing technologies to provide a product or service tailored to the customer’s unique value expectations. Some innovations are so commonplace that we forget how absurd they appeared at the time. Whoever believed that there would be a demand for bicycles without wheels!? Check out California Fitness…

What you sell is seldom what your customer buys! Most technical innovators are not market-driven, so they often fail to exploit the demand they create. The mobile phone market is a typical example. In fact, the humble SMS was never intended to be a customer service. It was originally developed as a mechanism for technicians to communicate with each other.

A new technology is seldom fully exploited by its inventor. A classic example is the transistor, invented by Bell Laboratories in 1947, but exploited by Akio Morita (president of Sony). He bought a license and produced a portable transistor radio costing one third the price of a ‘hi-fidelity’ vacuum tube radio, thereby reaching customers that valued portability and affordability over sound quality.

Many dominant companies often overlook their customers’ needs, thereby unwittingly providing an opportunity for a competitor. I had a problem with my Sony Vaio which, despite being stylish and rugged, cannot be serviced quickly and conveniently. Acer sells not only a cheaper notebook but also a warranty programme that guarantees a five-day turnaround. They have understood that it is not the quality and design of a notebook that counts, but its productivity.

The final strategy is to aim to control a niche market. If you develop a solution to one step of an expensive and complicated process then it is unlikely that anyone else will bother to compete, as price is often insignificant in relation to the total process. You can also aim to develop a speciality skill in the early stages of an emerging industry. Regardless of what you drive, the brakes in your vehicle are probably manufactured by Bendix.

You could also develop a speciality market, which often entails developing a relationship with every supplier in the market before anyone else. The bank cards in Thailand probably all come from a single manufacturer.

There are several techniques that can be followed to generate innovative ideas (e.g. Edward de Bono’s Six Thinking Hats, Six Value Shoes & Lateral Thinking, or Systematic Inventive Thinking developed by SIT in Israel), but first a company must actively incorporate an entrepreneurial spirit as part of its overall business policy. Indeed, a Director of Innovation is often required, who has the prestige and authority to explore and implement innovative projects. Procter & Gamble, 3M and Johnson & Johnson go so far as to launch separate business ventures, each with its own project manager.

Entrepreneurship is necessary to maintain a competitive advantage. Those who set aside time and resources, and make it an essential component of the business will thrive.

How to be Rich

3 June 2006

I read Rich Dad, Poor Dad many years ago and was taken in by what seemed to be good, simple advice on how to become rich.

I’ve since learnt that Robert Kyosaki’s ideas about how to become rich are just plain wrong, and his own claim to wealth is almost entirely fabricated. He is wealthy because of his books and seminars, not because he followed his own advice. His advice is that you need to buy property if you want to get rich.

There seems to be a spate of books around about how to get rich, and far too many of them seem to focus on property. Yes, you can make a lot of money out of property. The amazing thing about property is that a worthless piece of land by the sea, say, in the middle of nowhere can suddenly become immensely valuable and make the owner incredibly rich. But only if someone develops a successful tourist infrastructure in the region. Otherwise, the land remains (idyllic, but) worthless. You can also become rich by buying property in a growing economy. So long as you buy at the right time, after property has dropped in value or during a sluggish market.

Unfortunately, predicting when property values will rise or fall requires a lot of knowledge about the area and the economy. And property bubbles are notoriously difficult to understand. It takes a lot of guts and experience to buy and develop property. Not all of us can do it.

The only advice that I consider valuable from Rich Dad, Poor Dad is to avoid spending money on deteriorating assets. A new car, for instance, loses value the day you buy it. (Kyosaki doesn’t follow his own advice, by the way, when it comes to buying cars and watches.)

Some of the best advice I’ve received about becoming wealthy or building a business is as follows:

Rule No 1. Cashflow is King. Many people are asset rich but cash poor. With assets you can raise capital, but you always have to ensure that you can keep your business in business with enough cash.

Rule No 2. Network. Meet people who you can work with and develop alliances. Develop honest relationships with people who can refer you to others. The essence of networking is helping others and, by the principle of ‘paying it forward’, be able to find people who can help you.

Rule No 3. Leverage. You can’t do it all yourself. Find people who are good at what you can’t do well. And learn to delegate or outsource these activities. The art of management is being able to DO WORK THROUGH OTHERS. Learn to manage.

Rule No 4. Think Creatively. Keep your eyes open for opportunities and gaps in the market. Learn creative thinking techniques. Brainstorm with your friends and colleagues. Look at Paul Sloane’s Lateral Thinking Skills, Edward De Bono’s Thinking Course (the BBC edition) and Sur/Petition.

You don’t always need money to be ‘wealthy’. For a life-changing alternative perspective on wealth, read Jonathan Robinson’s Real Wealth.

Rule No 5. Learn to Organize Your Life. It’s not about managing your time, it’s about understanding where and how to focus your psychic/mental energy. Diet/exercise/recreation/rest play a part in this, but it’s also about deciding what’s important and where to ‘spend’ your energy. See Niel Fiore’s The Now Habit and David Allen’s Getting Things Done, and read Stephen Covey’s Seven Habits.

Rule No 6. Always ‘sharpen the saw’. It’s a lifelong process. Academic qualifications have little if any value in comparison to an attitude of continuous learning and personal development.

Rule No 7. Ask. But always understand how you can benefit your benefactor. Always look for ‘win-win’. Read Percy Ross’s Ask for the Moon and Get It.

Rule No 8. Persevere. As Winston Churchill famously said: “Never. Never. Never… give up!

Lao-tzu said: “A journey of a thousand miles begins with a single step.”

But if after all those steps you end up somewhere you don’t want to be… what then? Pooh and Piglet once spent hours chasing after heffalumps, only to find that they were going around in circles and following their own footsteps. Even large multinational corporations, governments and aid organisations get so caught up in the daily management of their business that they lose sight of what they are doing and why. More often than not, the main reason for continuing to spend money on a project is because it wasn’t thought out clearly in the beginning and so it evolves into a beast that needs continuous maintenance and refinement.

One of the first things I ask in a strategy workshop is “What business are you (really really) in?” Then I ask “Why?”

It only takes a little step back and some reflection to make a significant impact on your business. It might not be necessary to spend thousands (or even millions) on that new marketing campaign. Perhaps you don’t need to hire qualified people; hiring on some other basis might be more beneficial to the company. Is market share really that important? Or perhaps short-term profitability is less of a priority than developing a large customer base that can be tapped into five years down the line.

Bill Birnbaum, a strategy consultant, describes a relatively simple approach to help clearly define your corporate strategy.

Ask yourselves:

  • Where are we today?
  • Where do we want to be, and by when?
  • How do we get there?
  • Getting to where you want to be takes 90% or more of your time, money and effort. Surely, if you are going to walk a thousand miles, you should allow yourself a little time to decide on your destination and to fix on a guiding star? It’s so easy to get distracted – and there is nothing wrong with that, so long as you reflect a little on whether you choose a different destination based on new information or simply a change of heart.

    The planning and actual implementation part of having a strategy tends to make a lot more sense if you understand what you are trying to achieve. It also does wonders for corporate communication and team building. Many companies might say, “We are in business to satisfy our customers and make a profit.”

    Hardly an inspiring mission statement.

    But what if your company was dedicated – in a profitable way – to ensuring that every person on the planet owns a mobile phone and can cheaply communicate with any other person?

    Bill Gates had a preposterous vision more than 20 years ago, do you remember? “To ensure that every household has a computer.”

    Your mission and strategy don’t have to be quite so grandiose, but that will probably only mean that your profits won’t quite reach the same proportion as those of Microsoft.

    Start thinking strategically and your company is far more likely to achieve clarity and success and maintain that elusive competitive advantage.