MBA today is disrupting the competition?

The in word in business school today is disruption

AFTER seven weeks of cool spring weather, our Malaysian sun finally arrived in Boston. As I basked in the warm sunshine in the courtyard of McArthurs Hall, Harvard Business School (HBS), a gentle breeze reminded me of Awana Genting back to 2004, where I last enrolled in a two-week HBS management programme organised by our Malaysian HBS Alumni Club. Four HBS professors taught us then.

Here I am, eight years later, being taught by no less than 15 senior Harvard professors covering almost 120 case studies and numerous lectures. To justify their hefty fees, HBS threw their full arsenal of specialist professors at us. From basic strategy, finance, marketing subjects to deal making negotiation to social media to entrepreneurship. We have had the presence of former and current CEOs of Merck, Cisco, Carl Zeiss and many others attending our discussions on their company followed by their explanation and defence on their course of actions/decision making as per their case study.

Today, we covered the Facebook case study to coincide with its listing. And we had the director of FBI giving us a lecture after attending the case study on FBI reorganisation after Sept 11. To say that I am impressed would be an understatement.

It was like a Hollywood movie. There must be at least 10 FBI agents with their standard issued earpiece and dark suits staring at us at the entrance and exit. And then a standing ovation at the end of the speech to send off The Director. Captain America has saved the universe again.

HBS is the post graduate business school of the Harvard University. It has arguably the most revered MBA programme in the world. With a fixed annual enrolment of 900 students, an applicant has a 7% success rate and he or she will be at least 27 years old with an average of four years working experience. It is a two-year programme with full residential accommodation provided in campus. Depending on ones preferred living standards, the expected investment should be between US$160,000 and US$200,000 (RM480,000 and RM600,000) over two years.

It is in the executive education that HBS has amazed me the most. They have built a business model that is difficult to replicate when in the world, all kinds of education business is being commoditised. They have differentiated themselves in terms of positioning, reputation and school fees. High, higher, highest.

HBS is a money making machine. They have built an organisation that is always evolving, very sensitive to the external environment. If necessary, they are not afraid to modify their strategy, realign people, structure, processes and their unique culture to face the new environment. All the time, staying close to their core strategy of providing a unique learning experience to their target market. They practise what they preach.

Sensitive to change

So are you sensitive to the changing environment' When do you think is a good time for your organisation to adjust your strategy and realign your organisation to face new challenges' Is it during the good times or only when your organisation is in intensive care'

On hindsight, just look at Malaysia Airlines over the last 15 years. What do you think the management should have done then' When Southwest Airlines and Ryanair in the United States and Europe respectively have successfully taken their markets by storm, they should not have ignored the threat set by AirAsia. When you see air ticket prices being commoditised, you will be flying into a smaller gross margin zone. Which means you need a leaner and lower cost structured organisation to face a new challenging environment. So what do you think happened' And is their current organisational cost structure lean enough to face even tougher challenges today' We will find out within 15 months.

In the current world where many products and services are moving towards commoditisation, how are you differentiating your products and services from the competition' More importantly, how do you continue to differentiate to stay ahead of your competition' Look at Astro. From a virtual stranglehold grip on cable TV market, their monopoly status has been threatened by new entrants offering lower cost options straight to your homes. Astros response must be swift and decisive. As a true market leader, Astro should pre-empt and disrupt the competition. With new technology and smart devices like iPad and smartphones, Astro will deliver contents to their consumers anywhere their consumers find it convenient to consume. Just like The Stars ePaper.

Then from the competitors viewpoint, just imagine Malay Mail relaunched as an ePaper. Massive savings on newsprint and delivery costs. Does that mean that this is the beginning of the end of free physical newspaper' Absolutely intriguing. Technological advances have disrupted businesses all over the world. And HBS is actually reviewing amongst themselves whether e-learning will disrupt their current successful executive education model' Will your business be disrupted by new technologies' If it is, be afraid. Be very afraid.

High margin 

I have always emphasised that entrepreneur wannabes should go into high margin business. Which means avoid businesses that is being commoditised and having the ability to differentiate your products or services from your competition. The in word in business school today is disruption. Disrupt others before they disrupt you. Disrupt yourself to stay ahead. Stay ahead of technology disruption. Be the disruptor not the disruptee. There are no such words. I just disrupted the dictionary.

So is the HBS executive education programme as good as they claimed' Does it justify the high positioning and high cost charged' Honestly, I have no idea. They have kept us so busy from day one to stop us from thinking about it. And they have piled a tonne of case studies and notes onto us. Plus many free books written by the professors. So much so that this bunch of senior executives with an average age of 47 years face information fatigue, CPU overload and degrading eyesights.

Case studies still piling in until the last day. John Kotter still to speak next week. But spirits are high as we look forward to the close of the programme. This programme has been a major disruption to my life. Miss my country, my sunshine, my food, my friends and colleagues. And most of all my family.

Have a happy weekend.

ON YOUR OWN By TAN THIAM HOCK

The writer is an entrepreneur who hopes to share his experience and insights with readers who want to take that giant leap into business but are not sure if they should. Email him at thtan@alliancecosmetics.com 

Beauty and the beast in sports

Sports is a beautiful thing and sporting success is even more wonderful. But what do we do about the spoilsports that always dog the big events?



IT was a crazy night, wasn’t it? Yes, like everybody else, I am talking about last Sunday when the two giants of Manchester and the London upstarts called Queens Park Rangers took us all on a roller-coaster ride of emotions.

One minute, City were taking the title with QPR going down; the next, it was United taking the title and QPR staying up – and just when it seemed that all had been settled bar for the drunken celebrations on the red side of the town, everything turned on its head.

And City are the champions and QPR are staying up. Thank God for that — the QPR bit, I mean. I don’t care too much about City being champions although it’s nice to see the Devils off their high-horses for once.

The way the emotions ran that night, I almost wished QPR had just stayed down the season before. It’s just too much excitement for people like me.

And I’m sure I wasn’t the only one. But in all that excitement, we all forgot that other big game.

What other big game, you ask?

Well, Sunday was also the day when the national hockey team became Asian champions — for the first time ever, and at any age-level.

It was an achievement we should have been shouting about, a crowning glory for a side that has always been overshadowed by the South Asian giants Pakistan and India and, even the South Koreans. Those pesky Koreans beat us at everything, and it was great to see our boys whip them 6-3 in Malacca.

Now, we have to salute the young juniors who overcame the odds, beat the Indians in the semi-finals and the Pakistanis in the final to bury those old ghosts. And one of the players was still in mourning. His father had died just days earlier.

We also have to salute the coaches, the once-mercurial Minarwan Nawawi (who has never won the title even while playing in a star-studded team) and the ever-steady K. Dharmaraj.

Dharmaraj almost lost his job as coach but survived and went on to this.

Absolutely glorious for him and Minarwan. And it brought back memories of that fantastic fourth place finish in the World Cup in 1975. And we can now dream of greater glory at senior level.

But there always has to be an ugly side.

In Manchester, there was that dumb Joey Barton doing what he did — and after being red-carded!

And on the hockey pitch after Malaysia had become champions, the crowd went crazy. They surged on to the pitch. And guess what? They were not joining the boys in celebrations.

They were stealing the players’ hockey sticks!

Five players lost their sticks and Dharmaraj had to hastily hide his wallet for fear that it may be snatched from him.

What do we do about these crazy goons? It’s a problem that’s been dogging sports for years.

I remember in a veterans’ football tournament in Penang, a spectator came over to ask a winning player if he could take a look at his medal. When the guy handed it over, this young chap coolly walked away with the medal!

When all the other players caught him and forced him to return his medal, he brought a bunch of gangsters to beat up the players.

And they say Barton is a lout.

Talking of controversy dogging sports, that’s exactly what is happening with the next extravaganza we are waiting for. Euro 2012 has gotten ugly.

Ukraine and Poland are jointly hosting Europe’s greatest show. And to make sure it puts a fine face to the visiting world, Ukraine has decided to clear its streets of stray dogs.

So what do the authorities do? They round up the dogs, hit them with poison and then burn them in mobile incinerators.

And there have been claims that the dogs are still alive as they are set alight. It seems the dogs are being hanged as well.

There has been a huge outcry in the Internet. An online petition has been signed by thousands, and many are suggesting that the Euros be taken someplace else — some place where there is not that much cruelty to animals.

And Pamela Anderson is hot — under the collar, that is. The sex bombshell with the now less-than-extra-large chest has written to UEFA president Michel Platini to react to the mass slaughter.

She’s not the first sex symbol to be pained by the killing of dogs.

During the 1988 Olympics and the 2002 World Cup Finals in South Korea, the government had to tell its citizens not to eat dog meat. And butchers were also told not to hang dog carcasses in the windows.
It was Brigitte Bardot who complained then.

> Malaysia has its own dog woes, what with a jogger being killed in an attack and with authorities brazenly killing the animals in many places.

Why Not? By D. RAJ

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I WANT THIS DOG J

Click on the word DOG

HP on More Layoffs!

Hewlett Packard, CEO, Meg Whitman may announce a major layoff with next Wednesday’s earnings call when she also details a company restructuring plan. Whitman could eliminate 30,000 workers out of a total of 325,000 or 9% of the workforce. Whitman is repositioning the company away from PCs as smartphones and tablets displace desktop computers. HP may add to sales, product development and R&D. The New York Times reported the news.

Stop the Bleeding

HP needs innovation to staunch the slide in revenues and profits. Revenues could decline 4% to $122 billion this year from $127 billion in 2011.

Aggressive cost cutting by former CEO Mark Hurd may have disadvantaged the company by reducing products in the pipeline. Then, major acquisitions by Whitman’s immediate predecessor, Leo Apotheker, who was with the firm for less than a year, reduced the cash hoard but did not contribute to financial performance and earnings fell sharply. HP spent $40 billion in acquisitions over four years, but was not able to monetize them.

HP has mature product lines in decline. It dominates in PCs that face dwindling demand, margin pressure and intense competition from Asian suppliers. HP also dominates in printers, which generate cash but are fading. About 75% the services business is tied to printers, so that baby goes out with the bathwater. HP may combine the PC and printer units. HP does not play in smart phones and tablets.

Cheap and Getting Cheaper

HP has the lowest valuation of the large cap technology companies. Competitors Cisco, IBM and Oracle have market capitalizations of about 2.3 times revenues, but HP’s market cap is one-fourth its revenues. HP invests less in R&D than its rivals. On the average, Cisco, IBM and Oracle invest about 9% of revenues in R&D while HP invests 2%.

Unlike its competitors that have a vertical integration strategy, HP partners with Microsoft for operating software and with Intel for processors. Investors do not consider Microsoft and Intel to be innovators. Because HP does not control all the processes, it is slow to adopt new technologies. More than a decade ago, HP announced a vision to integrate all the entertainment devices in the home, including the PC and TV. But Apple made the vision a reality, not HP.

Tough Competition

In the consumer market, Apple and Google have the majority of share in smartphones and tablets. Apple leveraged  its iOS operating system that allows devices to synch up and interplay to lock customers into the brand. Apple controls the software, microprocessor design and manufacturing. The vertical integration allows it to beat rivals with advanced technologies.

Competitors have blocked the enterprise too. IBM trumped HP in consulting, security and systems management. Oracle beat HP in software, like big data, storage and analytics. And, Cisco controls networking and cloud gear. What is left?

About her plans, Whitman said in BusinessWeek in March that “We need to move quickly to capture emerging opportunities in areas like cloud, security, and information management,” Whitman continued. “We’ve already assembled some formidable assets. Now we need to align our portfolio to deliver a new generation of capabilities. We see a once-in-a-generation chance to define the future of technology and position HP as a leader for decades to come.”

By Susan Kalla, Forbes Contributor

 

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