Scotland and Whisky

Those who knew me long enough would know that I love whisky. It’s whisky, not whiskey. But nowadays, it does’t really matter much because great whiskies now come from everywhere and not just Scotland.

I tried Kavalan recently. Kavalan is from Taiwan. At first, everything about it puts me off. Kavalan?? What kind of name? Taiwan?? Taiwan for circuit boards is fine but whisky??? But tasting it is a different story. Kavalan is amazing stuffs! Amazing stuffs as in if you like that kind of notes. Fruity, vanilla, sweetness….. but if you are hardcore Lagavulin type of guys, well……. I tasted the Solist Vinho Barrique (I think they meant Soloist), Solist ex-Bourbon Cask, Port Cask Concertmaster and their standard bottling. All single malts. And they are really good stuffs. And they are expensive.

Now, if you like those sweet smell good fruity vanilla kind of of whiskies, you will do very well with a good bottle of Glengoyne. I finished a whole bottle of Glengoyne 17 years. Marvellous expression and unfortunately has been discontinued and now replaced by the 18 year old. Or the Auchentoshan Three Wood is also an exceptional whisky, if you like this kind of taste. Both Glengoyne and Auchentoshan is not below Kavalan in any sense and they are cheaper. But if you like it, of course you can try the Kavalan. Of the four, I like the Solist ex-Bourbon Cask the best.

And Kavalan whiskies have no age statement. The uniqueness of Taiwan and the hot weather resulted in the whiskies aging much much faster. But let the taste guide you. Not what they write on the labels.

Actually, me and my wife visited Scotland back in March this year. It is almost like a pilgrimage for me. It was part of our Europe trip where the main agenda was to see the Aurora Borealis in Kirkenes, Norway. Spectacular experience there! But that is for another post. Wow, Kirkenes!! We did not go all the way round Scotland, just the Highland Speyside area and we based ourselves in Aberdeen. The fact that the International Jazz Festival is happening there is also a bonus. Scotland is a beautiful country. Really nice landscape. And everywhere we go, the guys seems to look forward to the referendum for independence because they have decided to want to split but the results of the referendum yesterday seems to say otherwise. So be it for better or for worse.

Macallan is really a nice place to visit and they are really friendly. Glenfiddich too. But after some time, all the tours felt the same. They take you through the whole process of making whiskies and take you around to see how it is actually done. We went into the special Warehouse number 8 at Glenfiddich which is where they store their most precious stuffs. I saw the Solera vat. And I was thinking to myself, maybe 15 years later I will be drinking these.

And it takes so long for whiskies to be made. 12 years, 15 years, 18 years, 21 years…. wow, imagine the time.

Then there is this place called the Scotch Whisky Experience in Edinburg. Nice place to visit. There is where they have the largest whisky collection in the world. tasted the 21 Year Old Pulteney there and it was absolute liquid gold. Bought some bottles there. There was a blind tasting of a whisky and they served Ardbeg and I surprised everyone by guessing that correctly. But they do not know my favorite dram is an Ardbeg. The guide then paid more attention to me after that. Haha. Our guide there is actually a Malaysian but he is now there permanently. His parents migrated there.

So Scotland….. wonderful place to go, not only for whiskies but the people and also its so beautiful. Next time I go, I will go to the islands. My favorite dram is one smoky Ardbeg Corryvreckan. Ardbeg is really amazing. I want to visit them. And I have a small plot of land at Laphroaig too.

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So, writing again then

For some weird reasons, I feel like blogging again.

Maybe it’s the effect of reading Murakami’s latest, COLORLESS TSUKURU TAZAKI. Also perhaps I caught the writing bug again when I was revising my Go book for beginners, incorporating a new concept in teaching Go as shown us by Mr. Yang of the Ing Foundation.

But for whatever reasons, the fact that I am typing away on the keyboard now feels great.

It is perhaps also a form of release of the things that I have in my mind. I have always taken to writing, from diaries to journals since my younger days. And I think this did not leave me.

So here it is again. And until I get lazy, which I do not know when.

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Money in Business

Continuing from the business series, this post is my notes on money matters in business.

It is easy to get confused about finance or accounting. Many people gets scared when they hear about it. Balance sheet, ROCE, ROI, IRR, NPV, DCF, WACC, CAGR, etc. etc. But when it comes to money in business, there is one principle that takes precedence above the rest.

1. The principle is this: You must collect your money.

Many businesses go bust because they fail to collect their debts. This is a major chronic situation, especially so in desperation to get sales. The best type of businesses are those that collect cash upfront before delivery of goods or services. Heck, the best are those who collect upfront before production starts.

In the course of business, it is easy to forget this principle because the sales numbers are so tempting. And the apparent “friendliness” of your customers makes you believe that they will pay you on the dot. Most of the time, they don’t.

It has to be clear in your mind this thought: bad debts are worse than no sales.

Imagine that you earn 10% profits on your sales. If you fail to collect on just one job, you will have to do 10 more jobs of equal size and margin just to cover the debt that you failed to collect. This is a disaster!

2. The next principle is that you must pay your staff and suppliers on time. And if you have salespersons that earns commissions, you must also pay them on the dot.

Paying people on time establishes trust. Paying salespersons’ commission on time establishes motivation. And these are the people that supports the business, your suppliers and staff. Understand that without their support, for example, if suppliers stop delivering to you on time because you do not pay on time, or they do not deliver high quality raw materials to you, your end products will also reflect such inferior quality. Also, if you do not pay your staff on time, they will sooner or later look for other jobs and those who remain either is your secret admirer hoping one day to be able to marry you or those who cannot find a job elsewhere, which means you are keeping people that nobody else wants.

3. The third principle on money in business is to think of Inventory (stocks) as the devil that needs to be cast away. Inventory eats you dry. You should target zero inventory. Having inventory as “assets” is an accounting laughingstock because inventory is cost.

The problem with inventory is that you expect you can realize them in the future, turning them into cash. The sad truth is that a lot of inventory goes to scrap, and the cash spent to stock them also goes down the drain. This is not a smart thing to do.

Actually, all the above is what we call working capital management, or the cash cycle. It is how fast you get back the cash that you invested into the business and turn a profit. The shorter the time, the better off you are.

For example, imagine if you are selling handphones. The best scenario is your customers pay you upfront the full price of the handphone and then you use that money to buy the handphone from your supplier and then pass the handphone to your customer, keeping the profits in your pocket.

The worst scenario is you stock up one thousand phones hoping that you will sell all of them.

Collecting all the cash upfront is usually not possible nor realistic but you must at least get a deposit. This is a must.

There may be customers that you need to give some credit but still, you need to get some deposits or downpayment. The reason is very simple. If they are genuine customers, why is it that they cannot pay something upfront, as earnest money? And having a deposit will reduce the chances of them canceling the order after you have bought the raw materials/stocks.

If there is one person that is your friend in your finance department, that person is the credit control manager. Have him or her report to you directly. Have standard operating procedures and credit risk management policies in place. Make them inviolable. Stick to your guns, always remembering that one bad debt will take many good sales to recover, so don’t be greedy.

Bad things happen to greedy people.

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Principles of Business

As I am trying to write and distill what I learnt so far in business, I have come up with the following principles of business. They are actually pretty common sense but many people do get lost along the way and I thought I will post it here to remind myself. Each principle can easily be expandable and elaborated on but for my current convenience, I will just simply state it first.

1. To be in business, you need to sell things that people want to buy.

2. To make things that people want to buy, your products must be superior to your competitors’.

3. To create people’s desire to buy your superior products, you must first make people aware that your products exist.

4. When the people are aware of the existence of your products, you must make it convenient for them to purchase it.

So as you can see, the principles are pretty common sense and general but each can be further elaborated on. First you need to know what people want to buy. There are a million things that people wants to buy, so how do you decide what to sell? The guiding light will be to sell what you are good at, extraordinarily good at. Not just that you are good, but you are at least the best amongst your family, friends and acquaintances. So what is it? If you cannot figure this out at this point in time, do not proceed.

Next, how to make your products superior to your competitors. The first thing to know here is who are your competitors. Your competitors need not be those who sell the exact same products or service that you sell. Your competitors also consist of people offering alternative solution. For example, the competitor of a burger seller are not just other burger sellers but also the noodle store, the rice stall etc. because they offer the same solution to the problem. For example, in entertainment, the competitor of the TV box are not just merely those other TV channels but also the mobile phone, the iPad, the Mac or PC, etc. So after you figured out what you are really good at, then figure out who will be your competitors if you go into business and how can you be better than them. Even if you cook the best pasta amongst your family, friends and acquaintances, that doesn’t mean your pasta is better than the one across the street if you decide to start a pasta shop.

And then you need to spend a lot of time innovating. Your pasta may be the best now but they may no longer be so 6 months down the road. Look ahead of the curve. Improve your products. Innovate like mad, whether products or processes. Always strive to be better and better, just like a 100m sprinter always working so hard to clock a better time. Listen to customers. Observe behaviors and trends. Make innovation a process so that you can remain the best all the time.

Now, you are really good at something, and you know your pasta is the best in the neighborhood because you have tasted every single pasta shop, you still sell zero if no one knows you exists, that your pasta is the best in town. This is where marketing comes in. You need to shout, make every single person know that you exists and you have the best stuff in town. Do not be shy. Shout. Bang your pots and pans. Make yourself well known. Give no apologies for being the loudest to tell everyone you are the best there is.

And after everyone knows you exists and have the best pasta in town, they must be able to buy it, godamit. What is the use of a line of a hundred people if you can only cook one bowl of pasta every 30 minutes. Or that your stall is so inaccessible, going there is a major chore and hazard. In industry, for example, this is operations and customer service. You must always be contactable, accessible. You must always show your face and make it easy for people to do business with you. You must always be able to offer solution faster than anybody else in business. You must be there.

Push your products. Tell them why your products are so good. Show them that they will never get fired choosing you. Prove to them that you will always be there all the time, anytime. Keep in touch. Send cards. Do whatever it takes so that you will be there when they need you and you can neatly offer a superior solution to their problems, on budget, on time.

And of course, underlying it all, you need to have a great team but that is another major subject which I have touched on in my previous post.

So let’s think about every step in our daily business. Where are you at?

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The Business of Management

There are way more managers than entrepreneurs. Management is part of Entrepreneurship but there will be no Management if there are no Entrepreneurs. This post is about Management, especially so Management in a reasonably established and reasonably large enterprise. This is because I have never been an entrepreneur myself, those that starts businesses from scratch. The most part of my working life is spent being an employee, safe from having to burn my own pocket if the business fails and as such cannot really understand the thoughts and decisions that go through an entrepreneur’s mind. Only in the past several years where I begin to have some ownership in a business that these decisions and actions made some sense for me.

But this post is about Management. In my mind, there are two very distinct areas where their failure can be crippling. The first is Human Capital. The second is Growth. The former takes precedence in everything Management and is by far the hardest.

There are many books and courses that talks about that topic, those comes immediately to mind will be Jim Collin’s GOOD TO GREAT (get the right people on the bus), Patrick Lencioni’s THE ADVANTAGE, Marcus Buckingham’s FIRST, BREAK ALL THE RULES, Marc Effron and Miriam Ort’s ONE PAGE TALENT MANAGEMENT, Peter Senge’s THE FIFTH DISCIPLINE, Dave Ulrich’s HR TRANSFORMATION, Jack Welch’s WINNING to name a few pretty good ones.

What I have distilled from these books and courses and from real life experience are as follows:

1. First, you must establish a stable and consistent environment for people to work in. If the company is perpetually in a state of chaos and there exists a sense of uncertainty for the future, it is hard for the company to grow. It is like trying to grow a tree on unstable soil. The tree will never grow to become big and strong.

2. Hand in hand with the above, the people must believe in the future of the company and believe that the company’s future is also their future. The company’s success will be their success. It is important for the leadership team to not only paint the future of the company (many company does this via their mission/vision statements that are sometime so artificial, I believe they do it because of some corporate exercise), but to communicate and live this future. Everyone in the company must be made to know what this future is and how they can contribute to it, and everything the company does, its actions and culture must be aligned to it. The company must walk the talk.

3. Fairness. Animals, not only human beings, have a very strong instinct for fairness. It is ok to suffer together but if it is perceived that some people enjoy and some people suffers, it will turn the company upside down. Compensation and benefits, incentive systems, must be fair. In this sense, fair does not mean same. Fair here means those who works gets fairly rewarded and acknowledged, those who does not contribute are “corrected” or managed out. Rewards and incentives, opportunities to move up the ladder, must be as clear as daylight. Everyone in the company must know what will be rewarded and what will be punished.

4. Candor and transparency. The pre-requisite for fairness is candor and transparency. Without this, no one will believe in the system. This is especially true with the younger generation of employees, the oft-labelled Gen Y. But this is true to all levels of employees, not only Gen Y’s. Candor and transparency is already a pre-requisite before the advent of social media, blogs and such. It is just convenient to blame them. Candor and transparency will bust through gossips, red tapes, fakeness and all those dark evil. Candor and transparency is like the Sun, casting away all evils and vampires.

Contrary to many popular believes, people do not really need a superstar leader. People do not need a rock star CEO. People needs an honest, hardworking CEOs with a vision for the future and the ability to get everyone in the company to work towards that vision of success. People need a CEO or leadership team that they can trust their future on.

Then the Growth Imperative, as coined by Clayton Christensen in his book THE INNOVATOR’S SOLUTION. Philp Kotler’s MARKET YOUR WAY TO GROWTH is another book at sheds valuable insights in this area.

There is no question that growth is important to any company. But really, many company’s problem is not growth itself which in my mind is really a by product. Like money is a by product of great efforts, growth is a by product of great efforts too. Many companies do not grow or even fail because they are stubborn and their execution sucks.

Jim Collin’s GREAT BY CHOICE talks about the 20 Mile March. This disciplined, self-controlled strive towards a set direction and vision, with clear milestone markers really sets those who perform in the long term than those who fails trying too bombastically. It is important to set the company on this path of growth and communicate this clearly downwards. This is true of all execution, from product innovation, mergers and acquisition, entering new markets, business development etc.

There are a few observations that I have made:

1. There are too much emphasis on new products or new product categories. The reality is that improvements in existing products is much more important, and the fact is a lot of sales are still generated by these so-called “old” products. Yes, there may be products that need to be phased out but have you listened to the customers enough? Often, you don’t really need a “wow!” to grow top line revenue. Service, building trust with customers, improving on existing products and service (such as turnaround time), far trumps the birth of “wow!” products or product categories.

2. Once you determine any improvements or new product innovation, your execution must be flawless. If you consistently miss launch times, or when having launch the prototype but takes forever for the product to get out, whether is is mould problems, or tooling problems etc. will diminish a lot of trust from your sales persons (and we are not talking about customers yet because your sales persons are your immediate and first customer!). If your sales people do not believe in you, how would you think they can sell?

3. When entering a new market, you have to be prudent. Many people will advice that you spend big, invest heavily, make a presence. Most often, you will find yourself losing a ton of money before you can even see a cent of return. Making alliances is fine and in many cases the cornerstone of success but you cannot trust them with your farm. You have always to have a watchful eye on their activities with regular reports and most importantly, regular conversations with them and with people in the industry. Stick to your core business. Do what you know. If you open a restaurant, make sure you yourself know how to cook, and cook well. Ultimately, the successful running of a company in a foreign market depends on the strength of your local team. You have got to have a strong local team that is loyal to you and believe in the company. Align their incentives as such. Make them co-owners. No company can be strong if they do not have a strong local team.

Ok, enough ranting in this post. Time to go out and play some Go. In future posts, I may talk about my thoughts on operations and their many practices, e.g. Lean and such but no such initiative is possible if the company does not meet some criteria and no book says it better than Karen Martin’s THE OUTSTANDING ORGANIZATION.

By the way, no Management training is complete if one has not internalized Peter Drucker’s books, most notably MANAGEMENT: TASKS, RESPONSIBILITIES, PRACTICES, THE EFFECTIVE EXECUTIVE, MANAGING ONESELF, MANAGING FOR RESULTS, MANAGEMENT FOR THE 21ST CENTURY and INNOVATION & ENTREPRENEURSHIP.

Books mentioned in this post:

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The Future of Facebook

Any comments about the future are risky. The reason is obvious. If your prediction is wrong, you might be condemned and if you are right, you won’t get any prizes, in fact, no one might even acknowledge you. But this is not right from a moral point of view because both these reasons demonstrate human weakness, in the former case, the weakness of fear and in the latter, the weakness of unchecked ego.

I shall therefore proceed with this post about the future of Facebook. At least my Facebook.

In the beginning, Facebook was a revelation. Suddenly, I know what my friends and family are up to. Suddenly I get to connect not only with old friends from school but also with some vague celebrity of some sort that I am actually not very close with, but just merely an acquaintance at best due to the nature of my work. But the feeling was one of vague superiority, although I did not get into the race in having the most number of friends amongst my friends. At least not that vain.

As the experience of Facebook progressed, I became more discerning and stopped the rate of adding friends. But it is still a great tool to keep in touch with some friends and activities, such as Go related activities or board game related activities which I enjoy. I also enjoy the photos and stories posted by friends, some of them very inspirational. I also posted many photos and activities to share with my friends.

However, I only realized recently a few things on my Facebook activities. Not that I run an analytics about it (which I believe those guys at Facebook has) but just a reflection on my Facebook activities. I realized the following:

1. At the most, I communicate and participate in the activities of a small handful of my friends. I believe the number to be no more than 50 active participations. The rest are inactive. Their status and posts do pop up in my wall but I have no participation in them, sometimes not even interest. They have no consequences whatsoever in my life.

2. I sometimes get a feeling of disgust, to put it less mildly, at some posts. With all due respects, these posts are generally religious in nature. I know that the intent is good, the spreading of religious wisdom etc. but most of the time, it gets on my nerve. It gets preachy and gives me a holier-than-thou kind of feeling. My believe is religion should be a private affair, between you and God, something that you just believe and do, just do good, not talking good.

3. A show off affair. Yes, indeed it often feels like that. I myself is guilty of it sometimes. The need to show off is a result of an inferiority complex. The difference between showing off and sharing is one fine line. Sharing pictures of what you had for dinner in a particular restaurant and recommending the food because it is good is not show off. It is sharing. On the other hand, showing the food you eat in a business class flight is showing off.

I think Facebook, or at least my Facebook, will eventually become:

1. A network of very small group of family and friends where everyone in the group wants to know what each other are up to and not minding the food or vacation picture you put up, not to mention baby pictures (aarrgghh!). For me this group is at most around 50 people who are really close with me. This includes Facebook friends who are actively participating in my Facebook activities or those whom I participate in actively.

2. Facebook will eventually turn into a marketing tool, and a good one. And this is the reason to buy Facebook stocks because I think there is tremendous upside. I will find myself member of groups that interests me, such as board games, and would like to keep updated on the activities of the group. I might eventually make some purchases because of it. The main difference is the sincerity of the group. For example, the Boardgamecafe group is marvelous and superbly well run. I truly enjoy reading about their activities and explore the games that they played. This is a bunch of sincere board gamers who love to share their boardgame experience. Another example will be Go related groups, such as GoGameGuru, another superbly run company.

As such, the future of my Facebook will be one where I will have a very limited number of “friends”. This will also avoid annoying others with my posts the same way that some posts annoy me. I will keep in a separate group some people that interests me, people that I want to know their development and what is happening with them. But these people shall be spared from some of my posts meant for sharing with my group of close family and friends. I will also participate in groups that interest me, groups where I can contribute to and be active in. I think this will make my Facebook activities more meaningful and relevant.

The rest are crap.

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The Watery Worlds: Kerala’s Backwaters, Ha Long Bay and Venice

The natural progression for the travel journal after Vienna should be Venice but since we did not spend much time in Venice and since we just visited Ha Long Bay, might as well I do a two in one. And then as I started to write, I remembered how the experience in Ha Long Bay reminded me of the experience in the Backwaters of Kerala. We have similarly spent one night on the boat in the Backwaters as we did in Ha Long Bay and we did cruised and enjoyed the same carefreeness, if such a word exists.

Ha Long Bay is picturesque and the sights are pretty amazing. But that place felt very touristy and lacking in some character. The Backwaters, although there are also many tour operators there, the environment did not feel as congested as Ha Long Bay. The atmosphere was more relaxed and there are tons of character. But perhaps I am not comparing apple to apple. In the Backwaters, we had a whole boat to ourselves with our own captain and private cook. And it also costs much less than the Ha Long Bay trip.

Comparatively, I will visit the Backwaters again without having to think but I don’t think I want to return to Ha Long Bay. Picture to picture, the Backwaters does not seems at all comparable to those magnificent limestone hills of Ha Long Bay but there is a natural calm to the Backwaters, and definitely much more authentic.

What about Venice? A completely different animal altogether. It does not have the natural surroundings of the Backwaters nor Ha Long Bay but instead is surrounded by many beautiful buildings with some very nice architecture. Although it is somewhat a tourist city, in itself it has a lot of life. It is a real city where real people live and work and has a life. The way the canals run through those beautiful old buildings makes it one of the most beautiful cities I have visited. We did not spend enough time in Venice but will I return to Venice? Definitely.

The Backwaters is a small town on water. Venice is a city on water. Ha Long Bay is a tourist destination on water.

Pictures say a thousand words, so here they are.

VENICE, ITALY

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BACKWATERS, KERALA, INDIA

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HA LONG BAY, VIETNAM

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halong10So what’s your take?

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