Monday, May 23, 2011

Feeding Off Buffett’s Formula

Warren Buffett’s management record is even more successful than his phenomenal investment record. He uses a management strategy that is surprisingly simple yet promises successful outcomes to newcomers and seasoned professionals alike.

Warren Buffett is widely regarded as one of the most successful investors in the world. Often referred to as the "legendary investor," he is ranked the third wealthiest person in the world as of 2011. He is also the primary shareholder, chairman and CEO of Berkshire Hathaway, a conglomerate holding company that oversees and manages a number of subsidiary companies.

Why Emulate Buffett’ Management Style?

Besides being a genius at investing, Buffet is also a genius of a manager. His record speaks for itself. His company, Berkshire Hathaway, employs 233,000 employees around the globe with over eighty-eight CEOs of different companies reporting directly or indirectly to him. The company’s operational annual net income grew from USD18 a share in 1979 to USD4,093 a share in 2007. This equates to a compounding annual growth rate of 21.39 percent - substantially better than Berkshire’s investment portfolio that grew at an annual compounding rate of 19.78 percent in the same period. This record clearly illustrates that Warren and his managers are doing a fantastic job of minding the store.
What management philosophy underscores this success? Mary Buffet and David Clark give us an insider’s view of his managerial style by culling his most important strategies into a book titled ‘Warren Buffett’s Management Secrets: Proven Tools For Personal And Business Success.’ Here his managerial philosophy is distilled into five primary segments that combine to create a winning formula:

1. Pick the Right Business

Buffet is clear on the fact that not all businesses are created equal. The first step to success is to own, manage or work for the right business with the right economics working in your favour. To zero in on the right businesses look for those that tend to burn considerably less capital than they earn. This is usually because they produce a brand-name product that never has to change (e.g. Coca-Cola ) or because they provide a key service which gives them better profit margins that amounts to a durable competitive advantage.

2. Delegate Authority

If there is a single management skill one could pin on Buffett, it would be his willingness to delegate authority way beyond boundaries that most CEOs would be comfortable with. In his words, “We delegate almost to the point of abdication.” The norm of managers is to try and control as many events and people as possible. But micromanaging leads one to juggle too many tasks at once and the end result is neglect or lack of competence in undertaking many of these tasks.

3. Find A Manager With The Right Qualities

When picking managers, he seeks out people with an internal locus of control. These are people who are in control of themselves and their environment, who take responsibility for their failures and in the process learn from their mistakes. He also looks out for people who love what they do as these personalities end up going the extra mile and inspire others to do the same. He places emphasis on honesty too. As he puts it, “You don’t want to be in business with people who need a contract to be motivated to perform.” Another management trait Buffett values is cost consciousness as a way of life and not just when the business is failing. He determines this criteria by seeing how managers handle the seemingly little costs. He explains, “If managers aren’t disciplined on the little things, they will probably be undisciplined on the large things as well.” Lastly he looks for a manager who is a great investor, responsible for investing the firm’s money in people, products and new businesses with a long-term perspective in mind. (Buffett is a firm critic of a short-term focus as he believes it tends to make managers poor allocators of resources.)

4. Motivate Your Workforce

In this respect, Buffett is a student of the Dale Carnegie school that uses praise and criticism in a very specific way. His rule is simple: praise by name but criticise by category. As an example, he is quick to praise an individual banker but if he is unhappy with the banker, he criticizes the banking profession as a whole. And if he has to criticise someone personally, he makes it a point to praise the person first. It creates a sense of trust and the recipient is subsequently more likely to accept and act on constructive criticism as a result. When he wants something done, he frames it in such a manner that he speaks to the other person’s wants and needs and therefore gets rewarded with the appropriate response.

5. Buffett’s Managerial Axioms For Different Problems

“Leverage is very tempting and always leads to trouble.” Buffet is an old - school manager reluctant to use debt to improve earnings.

“Only in fairy tales are emperors told that they are naked.” This one pertains to the danger of managers surrounding themselves with sycophants. Buffet’s solution is to surround himself with as few people as possible and when he does, they are people with a great track record of making good calls when they are called on to do so.

“We rub our noses in mistakes of omission.” This relates to missed opportunities. Even the best managers miss opportunities, but they ask the hard questions as to why they missed them. This primes them to spot and seize a good opportunity the next time it turns up.

Source: Calibre, May 2011

Monday, May 9, 2011

Monday, April 25, 2011

Charting Your Business Career

You must be very lucky in Public Mutual , you know????

GAM Bala announcing the incoming activities

GAM Lee Peng - Promoting coming Business Opportunity Preview on 9th May 2011






Agency Manager: Melissa Leong " I give myself a challenge...by end of this year, I want to become a GAM!!"





Step by Step sales presenation by Agency Superviosr- Jason




Jason : "Every time when I see client, I will do the prospecting for UTCs & Sales together..."

."....Product, Market, Productivity & Can I do it??......"

GAM Susan" I see the light and the WOW factors"

Umm...I see......agency building is the way to go......

So....I must bring more prospect UTCs to 9th May One Vision BOP....

....when should we turn full time then........


Wah......agency building can earn so much??

UTC:"......we never go big if  we don't go for agency building...."

Jason, Agency Supervisor - taking down the notes...

Thursday, April 21, 2011

Tuesday, April 19, 2011

Handling Challeges & Objection Forum : Panel Speakers - President Henry Wong, GAM KK Say, GAM Ooi Ah Chai

Panel Speaker, GAM Ooi Ah Chai explained how to handle objection on "I don't have money to invest"..

Taking important notes...

What??? Don't Believe in Unit Trust???

List of questions from UTCs to be answered one by one by panel speakers..

Focus on the important tips!

Q & A

Open for question from the floor......

Great MC, GAM Susan setting the right mindset for UTCs

President Henry, answering question on Public China Select Fund

Graph comparison between Public Saving Fund and ASW 2020, ASM, ASB.

Don't miss the opportunity, come in now!

Thursday, April 14, 2011

Tuesday, April 12, 2011

Success Sales Workshop - Dialogue with Achievers

Ms Alicia is sharing on her success story - "Feb 2011 till now........RM 3,000,000 Personal Sales"

GAM Lee Peng & Sew Hong evaluating the speakers.....Ummm,....good sharing! write down the good points...

GAM facilitating the dialogues session with successful UTCs

Listen attentively

Wao!! CK Goh is using  the point system to measure his business productivity?? How ah??

Cindy : " Who have achieved more than 1 Million sales YTD?.?"

Ha..ha.......she found the answer ? 

Congratulations to the achievers!

Very serioius!! Talking about what they plan to do next ?

Monday, April 4, 2011

Thursday, March 24, 2011

Tuesday, March 15, 2011

BUSINESS TIME: Dividend Growth Challenge

The Employees Provident Fund (EPF) will find it tough to consistently pay high dividends as uncertainty over the prospects of major economies could have a big bearing on open economies like Malaysia, economists said.


They expect the EPF dividend payment to ease to around 4 per cent to 5 per cent this year, from nearly 6 per cent in 2010.

Malaysia Rating Corp Bhd (MARC) chief economist Nor Zahidi Alias said as external trade and portfolio flows influence financial market performance, the Malaysian financial market could experience some knee-jerk reactions if risk aversion starts to escalate.

Nor Zahidi Alias said he would not be surprised if the present market correction continues in the next few months, especially when the overall sentiment is soured by the still struggling European economies and persistently high unemployment in the US.

"Such developments will no doubt have negative repercussions on Malaysia's external sector. Therefore, paying consistently high dividends will be challenging not only for the EPF, but also for other asset managers," he said.
Among the macro factors that will affect EPF's performance in 2011 are the country's gross domestic (GDP) growth, inflation, oil prices, interest rates and ringgit exchange rates.

"Based on the moderate gross domestic product (GDP) growth anticipated at between 5 per cent and 6 per cent this year, we expect EPF's dividend payout to also ease to the 5 per cent average level," RAM Holdings group chief economist Dr Yeah Kim Leng said.

Over the last 10 years, EPF's dividend payout ranged between 4.25 per cent and 5.8 per cent annually with an average of 5 per cent. The highest dividend rate ever paid was 8.5 per cent in 1983 and 1986.

Last year, EPF's top-of-the-range payout of 5.8 per cent corresponds to a strong rebound of the economy where the GDP expanded 7.2 per cent following a contraction of 1.7 per cent during the global financial turmoil in 2009.

EPF's major challenge, Yeah said, is to find investible instruments for the RM10 billion-RM12 billion net contributions that it will receive this year.

Besides that, he said, the pension fund would find it hard enhancing or rebalancing its portfolio towards safe and higher yielding asset classes to achieve the highest possible returns without compromising its mandate of capital preservation.

EPF is one of Asia's largest pension funds with a total asset of RM440.5 billion as at December 31 last year.

Allianz Life Insurance Malaysia Bhd chief investment officer Esther Ong estimates EPF dividend payout to be between 4 per cent and 5 per cent this term.

She said it may not be easy for EPF to sustain its performance this year unless some gains earned in better years previously are being used for distribution this year.

Ong believes that due to a more challenging macro environment, higher rates are expected for the bond portfolio.

"Meanwhile, we anticipate a more moderate return from equities given rising inflationary risks and the more moderate economic recovery path could result in lower earnings growth compared to last year," she noted.

In retrospect, equities were the largest contributor to the EPF's gross investment income in 2010, representing 45.45 per cent of its total gross investment income.

A total of RM10.94 billion was earned by EPF from equities last year, reflecting a significant 125.69 per cent increase from RM4.85 billion earned in 2009.

Read more: Dividend growth challenge http://www.btimes.com.my/Current_News/BTIMES/articles/epf08/Article/index_html#ixzz1GagFvs9P