THE VULNERABILITY OF SMART ALECKS

ST Jimmy | Monday, October 31, 2011 | | 0 comments

If you care to check a dictionary, the core meaning of “smart aleck” depicts a person who thinks he/she is intelligent and who always behaves he/she has an answer to everything. In short, if we are referring to a male, he deems himself to be “Mr. Know All”. A cruder description in modern day lingo is “smart ass”. In a way, a smart aleck is obnoxiously self-assertive and wants to reflect a class above others.

Smart alecks may have scored some successful results, and thus are imbued with a complex of superiority. However, there may come a point when they become most vulnerable, to the extent that when they get hit, they do not even understand what had hit them.  The best way to deal with them is to ignore them and let them continue with this kind of mind-set. Sooner or later, they will meet a natural downfall. Why do I say so?

A smart aleck is not cognizant of the realistic environment, surroundings and events around his sphere. Because he thinks he is smart, he becomes blind, and thus most susceptible, to possible fallacies that may result from unrealised misjudgements. Because he thinks he is smart, he has tendencies to plot schemes that he believes are infallible.

The day will come……at some time, somewhere, somehow, and in some unexpected circumstances, he will encounter a serious collision against a hard wall that can greatly traumatise him……..all because of his own doing, and all because he continues to behave as a smart aleck.

A smart Aleck who wields a sword brazenly will taste the sharpness of another person’s sword one day. A smart aleck who plays “human” games will get exhausted by the same games he plays, sooner or later. 

There is a Chinese adage which says short people are inclined to be smart and witty in order to compete. Napolean Bonarparte, the conqueror of Europe in the earlier part of the 19th century, was short in stature. He deemed himself to be a smart statesman of France. He won many battles at the height of his pursuits for power. He was able to revamp the French army into a formidable force. Yes, he was indeed smart. But it was due to his “blind” smartness that cost him his greatest mistake and defeat – his attack on Russia in June of year 1812. 

Napolean reckoned his well-equipped army would easily sweep off the Russians because the latter were in fact many peasants put together to defend the country. He sent in more than 500,000 soldiers to the Russian territory. He expected a short war, planned to engage a major battle, the kind that he usually won. However, Czar Alexander 1 was wise. He instructed the Russian army to keep on retreating every time Napolean’s side tried to attack.  The Russians also deployed the “scorched-earth” policy, i.e. burning the places, including livestock and food, they left behind.  The French brought along insufficient food, as Napolean expected a short-lived war and also believing that his army could rely on the left behind supplies after each conquest. In September, his weakening army force entered Moscow. The Russians abandoned the city after burning it into ruins. As winter set in, the French army had to pull back to France. Cold blizzards and hunger took toil on the French army. In the end, the army was decimated to about 30,000 men who survived. Prussia and Austria, the French allies, took the opportunity to switch camps. From then onwards, the morale of the French army plunged low. In 1813, Napolean raised a new army of around 300,000, which was then crushed at the battle of Leipzig.

Napolean was smart, but his smartness did not help him to expect that the Russians withdrew instead of putting up a fight. The devastation of his huge army in the march to Russia sparked the beginning of his downfall as a statesman. Napolean was smart. On the other hand, the simple Czar Alexander 1 was wise. Smart man is never a wise man.

A smart aleck will not think, view and perceive holistically. He is micro in his concepts, not macro. He is impulsive and brash, without patience and perseverance. 

Yes, smartness can rebound backwards and kill own self. A smart aleck will seal his own fatal fate in a matter of time.

Whenever I come across a smart aleck, I let him continue to believe he is smart. In fact, I would “fan” his enthusiasm. Ultimately, he will meet his “death” by his own doing……..or in pun, “death by natural cause”.




Of 2012 Budget & 2012 GDP Growth

ST Jimmy | Friday, October 14, 2011 | | 0 comments




At the time of announcing the 2012 budget, our Prime Minister also declared the official GDP growth expectation to remain at 5-6 per cent. Rather than being an economic pundit – of which I am not really qualified - to predict whether the rate is sustainable in the face of current global slowdown, yet there are relevant factors that would have a bearing in this respect. I wish to cite the following points for your ponder:-

·        * New Straits Times (Business Times segment) quoted several economists as being surprised by the official 5-6 per cent growth target, especially with the looming uncertainties in the global economy.  Gan Eng Peng, the head of equities of Hwang DBS Investment Management, opined that GDP growth of 2 to 3 per cent would be more realistic in view of a “recessionary Europe, a very slow US economy and a tight monetary policy in China.”

·         *The budget is said to be welfare-oriented, with large baskets of hand-outs and goodies for the rakyat. It appears to focus on making the rakyat happy. However, I do not see sufficient elaborations on how the RM230.83 billion expenditure will vibrantly drive economic activities that are geared toward achieving the targeted growth rate.

·        * From the looks of the contents, do I feel  it is leaned towards a very soon-to-be general elections? Personally, I am inclined to feel that is so…………are you? Explains why it is a welfare-oriented budget?

·         *With so much money to be spent on hand-outs and goodies, would that be a strain on the Government’s prevailing efforts to curtail budget deficits (i.e debts over GDP growth)? Our Prime Minister said the Government has the monetary resources to provide the hand-outs and goodies, but the question as to what kind of bearing or impact the expenses would have on efforts to reduce the current deficit of 5.4% to 4.7% in 2012 is still pertinent. 

Once again, happy pondering, folks.

5 Dominant Styles of Direct Sales Force Leaders

ST Jimmy | Friday, October 14, 2011 | | 0 comments

(Foreword: What I am sharing now is a re-production (with modifications) of an article which I contributed quite some years ago to the in-house magazine of American International Assurance (AIA), Malaysia. Although I am no longer with this company, which I served for more than three decades, yet I still retain all my written contributions in my personal file for sentimental reasons. I sense the basics of leadership with regard to running sales force groups or units – commonly termed as agencies in the insurance industry – have not much differed, but stood as prevalent styles until today. While the contents of the article are more related to the insurance industry, I believe the same could be applicable to direct sales force leaders of other industries whose key role is to work with their members for the key objective of bringing in the sales.)

In my many years of attachment to AIA, I have had countless memorable interactions with agency members. I have had carved a great interest in observing varying working relationship types between agency leaders and their group members. The way a leader deals with his agents invariably reflects his main functional characteristic, and therefore his leadership style.

The points expressed here are based on notes recorded by me from personal observations. Of the five styles which I am propounding, none is more superior over the rest. All styles are equally potent provided they are applied in the right perspective. However, if executed without prudence, each style may bring about setbacks; hence I also highlight some “caveats” that should be noted as precautions. 

THE DISCIPLINE/COMMANDING TYPE
Autocratic. Normally a disciplinarian too. Likes to give instructions. Serious. Expects members to fully adhere  to his instructions. Frequently admonishes members. Direct. Stringent. 

The style works well…… provided:-
  • Leader shows leadership by example.
  • Leader has a store of other good qualities to attract “natural” respect rather than demanding “forced” respect.

If applied excessively without discernment, members will either rebel or avoid coming into contract with the leader.

THE TECHNICAL/EDUCATIONAL TYPE

Functions like a teacher. Implements systematic programmes. Emphasises on techniques, skills and product knowledge. Places foremost importance on training than anything else.

To be effective:           
  • Leader must be knowledgeable and skilful enough to handle all technical aspects.
  • Members are receptive to training and learning – mostly of the younger set.
  • Practical methods like joint fieldwork and role plays should also be incorporated into the training programmes.
Beware: Agents who are over-taught to be engrossed in knowledge-seeking focus may develop a tendency to become “academicians” instead of sales persons.  This kind of leader should always remember to guide members to drive for sales while acknowledging the need to allot some time in “sharpening the saw”.

THE PUBLIC RELATIONS TYPE

Goodwill is the key word. Uses interpersonal and human relationship techniques to secure support from  members. Having fellowship activities with members, e.g. lunch or dinner, is a common feature. Leaders in this category are normally generous. Probably shows care and concern or empathy as a means to establish goodwill.  Such a leader maintains cordial relations with members. 

Possible drawback:  Some members, for example the high producers, might take advantage of their leader’s goodwill to demand for special attention, like special incentives. Due to the culture of cordial relations, it may not be easy for the leader to manage the situation. Likewise, it may not be easy for the leader to exert discipline and control over errant members.

Another caution:  Any expression of care and concern must be reflective of sincere intentions. Such gestures, if perceived to be “superficial” by members, will be counteractive.

THE PROBLEM SOLVING TYPE

Deems his role as a “saviour”.  Whenever a member faces a problem, he is ever ready to help. Spends much time in counselling, correcting and handling problems for members. Has tendency to take over member’s tasks in difficult situations.

Major snag: Likelihood of members becoming over-dependent on the leader. They may not be able to solve problems on their own, or intentionally pass the buck to him since the latter is willing to step in. The side effect is that he will be too bogged down handling problems for members at the expense of other aspects that also need his attention. He also stands the risk of being labelled ineffective if results of his intervention turn out unfavourable to members. Another side effect is, the calibre of members will be stifled.

THE MOTIVATION TYPE

A convincer. A morale booster. Possesses charisma and eloquent skills. Deploys psychology to a great extent for pepping up members. Knows how to hit the soft spot or hot button of a member.
Combined with technical and public relations skills, the motivator becomes a dynamic personality.

Important reminder:  Avoid providing lip service. Some motivators convince others what to do but without demonstrating how to do – there is no follow-through. An adept motivator is one who also guides his subordinates to reach the destination after having spurred them to embark on the journey.

To sum up, I wish to portray the following comments:

Some leaders feature one of the five as their dominant style. Some manifest a combination of two or more in varying degrees. Those who do not possess any – albeit only a few – would be in a very precarious situation, for the probability that they would ultimately fail as leaders is eminently imminent. On the contrary, an outstanding leader is able to execute all five styles in alternation, depending on the situation at hand and character of the member he is interacting with. And he applies each style prudently.

Since not many are endowed with all the five styles, what then?

The long range solution is to find ways and means for upgrading oneself in the areas one is lacking. For example, if a leader has not been very much of a motivator all this while, it is time he learns to be more expressive. It is time he learns how to identify and then hit the hot buttons of members In his group. Acquiring “people” knowledge will be an added strength.

The short range solution is easier but transient – that is, to secure for help or influence of third parties. For example, if a leader lacks the necessary technical qualities, he may want to request the assistance of a trainer in the company to help impart relevant knowledge to his team. But bear in mind, borrowing influence from related third parties can only work on ad-hoc basis. It will never last as a permanent or long term arrangement.

QUOTES ON LEADERSHIP:
  • Easiest measure of leadership is by looking at the calibre of people who choose to follow and stay with the leader (My own coined phrase)
  • Leadership is action, not position (Donald McGannon)
  • You can only lead a follower along the same path and to the furthest point that you yourself have gone. But in the longer run, you should  encourage (not lead) him to explore new paths - of course with your initial guidance - so that he can lead his own followers along his paths one day (My own coined phrase)
  • Leaders gain strength by sharing strength (Unknown)
  • A leader is a dealer of hope (Napolean Bonarparte)

Remembering The Good Old Times........In Humorous Vein

ST Jimmy | Friday, October 07, 2011 | | 0 comments


          

After more than three decades of past employment in an international insurance company before my recent retirement, I can still recall very vividly the humorous events that I experienced (and which I still cherish as the good old times) in my earlier years. And based on these experiences, I coined this prose for my own reminder:  “Add fun to work, and work will be fun”. Those years (I am talking about the 70s’ till early 90s’) the personnel at large - regardless whether they were administrative staff or members of the agency force, regardless of rank or position – were cordial in dealings.  A sense of affiliation prevailed amongst the personnel to each other and to the company. I would give my commendations to the top executives of that period who either laid or maintained the path for the close rapport across all sectors. Let me cut short the prelude and now recount to you a few of the real memorable events.

·        1. It happened in 1978. I was based in Melaka – my first station of work in the company. There was a young agent Paul, a bachelor in his late 20s who was very diligent but naïve in social relationship skills. Paul was known to have quite a number of middle-aged single career ladies in his client portfolio.

One day, my superior walked into my office with Paul and his agency leader. “Can you please listen to Paul and see how you can help,” he said, in a hurry to attend a meeting elsewhere. Noticing that Paul looked dejected, I began by asking what had transpired.

Paul: “I was presenting the 20-Year Endowment with Reversionary Bonus plan plus Hospitalisation & Surgical benefit to my lady prospect who is an accounts manager. Everything appeared to have gone on fine. In fact, she gave the signal she was interested. Suddenly, as I was about to go for the close, she became very unfriendly and walked out.”

Me: “Is the prospect married? How old is she?”  I was keen to find out first whether the prospect was yet another single middle-aged lady to be added to his portfolio.

Paul: “Single, close to 40 years old.”

Me:  “Just before that point she walked out, can you narrate what happened?”

Paul: “Oh, I took out the application form for her to complete. She actually smiled at me but posed me the question why she should take up a policy from me instead of another agent she knows.”

Me: “Then, what did you reply?”

Paul: “ I said, ‘I specialise in servicing single ladies like you.....you can be assured of full satisfaction, just like many other single ladies who are my existing clients.’ ”

I sniggered. “That’s the problem. It’s your last statement to her,” I retorted.

Paul: “But what’s wrong with that statement?” He scratched his head in naivety.

I explained that it was the wrong choice of words, especially “servicing” and “full satisfaction”, and the wrong way to put across the intended message. Surely, the prospect, being still single at her age, felt offended as she would have thought he was trying to get fresh with her. “Servicing” and “satisfaction” could connote the sexual context, I said.

(Actually, Paul meant to convey the message that he was very service-oriented, and his existing clients, many of whom were single career ladies like the prospect, were happy with his committed policyholder services.)

With the permission of his agency leader, I offered to help draft a letter (for Paul to sign) to the prospect. The purpose was four-fold; firstly to thank her for allowing Paul to meet her, secondly to list out the reasons why the proposed plan was suitable for her, thirdly to reinforce that Paul was committed to provide prompt and continuous after-sales policyholder services to his clients, fourthly to seek another meeting opportunity.  I also advised Paul get consent from a couple of his existing clients, who were in similar career positions and marital status as the prospect, to be mentioned as his referees in the letter (in case the prospect wished to cross-check his credibility).

Bingo! That did the job. The prospect agreed to meet Paul again after receiving his letter. He finally made the sale. The episode ended well.

·        2. Also 1978. All agency leaders and sales support staff participated in a sales management school programme in Port Dickson. One of the topics was on the definition of dynamism. After rendering a lengthy elaboration, the lady trainer asked the audience to identify a Malaysian personality who could fit the following characteristics – a person of action, very energetic,  enigmatic, wide exposure, performance and results oriented,  popular, can capture people’s attention and have many supporters. Silence ensued for some moments. “Don’t tell me none of you can identify even one personality who fits the description?”

Then one leader jumped up from his seat. He echoed out loudly: “Rose Chan!!!. She fits the characteristics perfectly!!!”

Everybody burst into hilarious laughter. The head of agency, who acted as the sergeant-at-arms of the event, emerged to the floor and declared: “Mr. Ng, for your creative answer, I reward you RM10. The rest of you……….for laughing at the creative answer, I fine RM1 each!” We gladly paid the fine.          

(Note: Peers of my age group or older definitely know who Rose Chan was. To those who are much younger and do not know, well, you go check with the older guys.)

·         3. Year 1988. I was based in Perak. The General Manager came for his official visit. During discourse with him, I thought it would be timely to bring up some technical issues, which were bugging me, for his opinions. His response came  to me as words of wisdom, nicely put in humour. “You have been appointed to handle such matters. It’s your role. You have the technical knowledge. Don’t look at me for answers. I know a bit of everything  in  general, and not in specifics………that’s why I am called the general manager!  You know the specifics of your tasks better than me. Use your discretion wisely, backed by specific substantiating grounds. Don’t generalise like what I always do as general manager.” Boy! I felt greatly empowered by him.

·         4. Year 1991. The previous General Manager was promoted to a regional post at home office level. His replacement was a very hands-on gentleman, well-versed in administrative operations and technical aspects. Since he implemented the e-mail facility for staff, he was encouraging all to switch to the new electronic channel for communication, especially among staff stationed at different locations, instead of relying on manual letters and phone calls.

Not long after he took over the helm, he paid an official visit to Perak. After our personal meeting, he instructed me to send an e-mail to my direct superior in Kuala Lumpur regarding the points of concurrence arrived at during the discussions. I called in my secretary as I wanted to dictate to her the points so that she could send the e-mail message on my behalf.

“No, no. I want you to send the e-mail by yourself. I want the communication to be confidential among the three of us only,” he instantly advised.

“I’m sorry. I don’t know how to do it. All along, she has been helping me to send out e-mails,” I replied

“I’m very disappointed with you! This is not acceptable. I have to penalise you. Let’s put aside the e-mail for the time being. I will let you know what your penalty is during lunch,” he commented in reprimanding tone. My heart sank, thinking that I would be in hot soup.

We went to a Chinese restaurant for lunch. Immediately after we sat down, he said: “I let you know your penalty now before we order food. I penalise you to have two rounds of beer with me, and not more than two. And make sure the food you order is good value for money,” he quipped with a sneer.      

Surprise to me. “That’s it?”

“Yes, that all to it.”

“But what about the e-mail………..……….”

He quickly interjected. “No need to send.  I just wanted to test you whether you know how to use e-mail. I caught you off-guard. My recent instruction to all staff members that they should send messages via e-mail as far as possible is clear. So, make sure you start learning to e-mail by yourself……understood?!”                             

“Yes sir! Will do, sir!” I then sighed in great relief and released a radiant smile.

Yes, those were the good old times. Moral of my real stories: Never underestimate the power of proactive communication, amicable working relationship and conducive working environment.

LATEST POINTERS ON CURRENT & NEAR FUTURE MARKET SCENARIO

ST Jimmy | Monday, October 03, 2011 | | 1 comments

Like elsewhere, the Malaysian stock market is still in suppressed mood due to continuing economic issues faced by the US and European nations. Almost hitting 1,600 points just less than two months ago (July 11, 2011), the current performance is now hovering below the 1,400 mark.

Cautious sentiments are still enveloping the market scene. The question that intrigues the minds of the “watchers” is, will the bearish trend drop further, to around 1200-plus points before end of October?

Rather than delving in lengthy personal narratives, I instead like to list out some pointers which I elicited from various sources. My objective is for you to reflect and then conclude your own stance in respect of near term to slightly longer term view. The pointers are on both the global scope and the local scene.

1.       On The US

·         On Sep. 15, President Barack Obama proposed the American Jobs Act which would unleash the US$447 billion jobs plan to boost GDP growth by 2 per cent and shave one per cent off the unemployment rate. He said the plan would add as many as 1.9 million jobs.  (Source: NST, Sep. 17, 2011)
·         The number of Americans claiming new unemployment benefits fell to a five-month low in the third week of September, 2011, while the economy grew slightly more than previously reported in the second quarter, the latest suggestion a recession was not in the cards. GDP grew at annual rate of 1.3 per cent in the second quarter, up from the previously estimated 1.0 per cent. The GDP data suggests that the US economy experienced a slightly better footing in the third quarter, compared to the first three months of the year when the economy expanded at 0.4 per cent. (Source: Business Times, Sep. 30, 2011)
·         Many small companies in the US (employing up to 500 workers) are facing difficulty of getting working capital. Small companies account for 99% of all American businesses, two-thirds of private-sector employment and half of the economic output. The divergence in the health of these businesses and larger companies helps to explain why the world’s biggest economy created on balance no new jobs in August. More small companies are cutting jobs than hiring, although the situation is slowly improving. Three-quarters of small companies have adopted the “wait and see” approach. A key concern of small and medium industrial suppliers is that big manufacturers will cut back or go out of business altogether. A second problem is the difficulty of obtaining credit. Would-be entrepreneurs seeking to buy existing small companies are also finding it hard to secure loans. (Source: The Edge Malaysia, Sep. 19, 2011)

2.       On Europe

·         Desperate measures to prevent Greece from going into default and the contagion effect from spreading led the German parliament agreeing to increase the European Financial Stability Facility (EFSF) to €440 billion from €250 billion and giving it more powers to buy bonds of distressed members, recapitalise banks and provide emergency loans to needy governments. This would provide the much needed stability for the European region. The question is whether Greece will be able to continuously meet the strict austerity measures to reduce deficits as outlined by EU, ECB and IMF. Germany declared firm support for the euro. (Source: Business Times, Oct. 3, 2011)

3.       On China & Asia

·         China’s manufacturing improved slightly in September, for a second month of gains, with domestic demand helping to offset weaknesses in exports, according to a survey released. The survey followed a similar one released by HSBC, suggesting still sluggish growth in demand. But both suggest the economy remains stable, with scant signs of a major slowdown that could sap growth in other countries that rely on Chinese industries to drive demand for iron ore, factory machinery and other goods. The latest results “should provide some support to global investor confidence, if only at the margin,” said Alistair Thornton of HIS Global Insight. Most forecasts, however, put growth at a still dynamic rate of between 8 per cent and 9 per cent. (Source: Business Times, Oct. 3, 2011)

   The wealth in Asia will triple by 2015 to US$15.8 trillion, according to findings of the recently published Asia Wealth Report by private Swiss bank Julius Baer. The report, done in collaboration with brokerage and investment group CLSA, also estimates the the current 1.15 million high net worth individuals (HNWI) across Asia will double to 2.82 million by 2015. China alone is estimated to hold 55.4% of this wealth in 2015 and will have 49.6% of the total HNWI.

4.       On Malaysia

·         Of late, we see GLCs  sell-off. The reason is likely due to liquidation in order to meet redemption and margin call by foreign or local players. In times of uncertainty and volatility, investors and fund managers may want to exit quickly. (Source: My friend, who is a market pundit)
·         Also of late, we see proposed acquisition/merger deals by GLCs. Example: MAS-AirAsia, Sime Darby-E&O, latest is PNB-SP Setia. Questions:  Are these pre-election moves? Does it mean the General Elections will be quite soon? (Source: Another friend who is also a market pundit)
·         Based on data provided by Credit Suisse, foreign ownership in Malaysia fell to 21.6% last month versus 22.1% a month earlier as foreigners sold RM3.8 billion worth of stocks in August. The local benchmark index has shed some 17% based on the recent low of 1,310.53 and the index’s all-time high of 1,597.08. This is relatively less against other key markets in Asia which are in bear market territory after shedding more than 20% on the same basis in the recent sell-off. OSK Research’s new bottom for the key FBM KLCI is 1,350 and it is telling clients to “bottom-nibble” but not “aggressively bottom-fish”. Quote by OSK Research head Chris Eng: “In the medium term, we maintain our 2012 FBM KLCI fair value at 1,466, seeing a slow recovery forward unlike in 2009.” (Source: StarBiz, Oct. 1, 2011)
·         Locally, anticipation of a general election next month or by March 2012 is fueling speculation that the 2012 Budget announcement on Friday will be business and consumer friendly. Firstly, it would expedite projects highlighted under the Economic Transformation Programme to buffer downside from slowing external demand. Secondly, it would introduce further liberalisation and incentives to make businesses more competitive as our neighbours like Indonesia emerge as more conducive investment destinations. (Source:  Business Times, Oct. 3, 2011)

5.       On Gold

·         On Sep. 2, gold reached an all-time high of US$1.921. Gold has lost just over 20 per cent of its value to hit US$1,532 only three weeks later. Mirroring the fall in gold is the rise of the dollar, itself a safe-haven currency despite recent downgrade of US government debt. To Ross Norman, chief executive of gold-trading firm Sharps Pixley, a strong dollar makes gold expensive to those not in the US “and consequently gold falls”. The pillars supporting high gold prices have collapsed, said Julian Jessop, chief global economist at think-tank Capital Economic. “First, demand for gold as an inflation hedge has fallen as the global economy has slowed and other commodity prices have tumbled……Second, the more general return of confidence in the dollar has reduced demand for gold as a hedge against a collapse in the US currency,” he said. (Source: NST, Oct. 3, 2011)
My personal view (which may differ with yours)? Well, I have this to say:
If another bottom in October does set in, it may be timely to look for buying opportunities.  Although  some pundits may feel the possibility of the local market coming down further to lower levels, say 1,000-plus points,  by the middle of next year (after the general elections?), the apt perception is to buy good stocks with sound fundamentals and hold them for at least the medium term.


Best Regards.







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