Its challenging to be optimistic in 2023

Every generation needs a revolution - an entrepreneurial revolution

Its a good idea to be optimistic and tough amidst the turmoil in 2023  But look around the external environment:

1.  Big banks in US and Europe failing  (3s in the States, CSB in Switzerland, Deutsche Bank next?)

     What follows, industries failing too?

2.  Europe and US are reported  to be in recession?

3.  The only way that Central Banks and US Feds can control inflation is to put the economy into

      recession -  lay offs so that the consumer will buy less;

4.  Big company closures in Japan:     Sharp, Toshiba, the scandal at Olympus cameras

     (It incurred big losses when it parlayed into stocks, and other unrelated non camera ventures; the

     only saving grace was the Olympus medical)

     Sharp company failure

     Inappropiate accounting procedures at Toshiba

     Japan's 20 year recession - ADB

     We are better off than Japan whose GDP growth was reported to be only 1%;  vs Philippines 6%

      Japan used to be our idol in the 1990s for growth innovation and management

Lessons from success and bust stories: Sharp of Japan

Every generation needs a revolution - an entrepreneurial revolution

Please find enclosed a link to the video on the decline of Sharp, its huge losses incurred in the latter years and its acquisition by Foxconn a Taiwanese subcontractor.

20 year fall of Sharp company

Lessons that I learned:  (How about you)

1.   It does not mean that if you are 40 years old, or 100 years old as Sharp, you can not fail.  You can still fail.

2.  It debunks the superiority of  Japanese management.   We can be superior too.  Or at least strive to be good.   Our bad maintenance of the park, and not 100% interment brings us closer to losing our business.  We are not asking people to manufacture high tech products, only regular cleaning and grass cutting, and we can not do this well

3.   The cost reduction alternative:

      1.  Buy or make decision

      2.  Offshoring outsourcing

      Making your own products does not mean its cheaper.  If it is made cheaper in Taiwan or

      or Chna go for it.  Sellers of carbon wheels and bike frame have it done in Taiwan which the         charge only for $200 per; whereas it would cost them $500 if they make it Europe or US.

      One such manufacturer American Classic could not compete and had to close shop

       because they were uncompetitive.

      Sharp continued to pursue its plans of local manufacturing despite the fact that land

      and materials is expensive in Japan  Labor which costs about P100,000 in Japan per month

      can be had for a max of say P14,000 in PHL.   Rather than building a plant, Sharp should 

       have opted for this course of action.  Trouble is they built another plant

4.  Innovation is temporary

    You gain leadership by innovating only temporarily.  It has to be defended and protected.

     You cant win a war or a game, you have to have a high winning average.   If innovation is

    the name of the game, it has to be continuous process.  Kaizen

    You must work hard on basics too:   5s tpm, (maintenance)

   You must keep watch too on the pace of innovation of competitors.  They are not sleeping

   

    Complacency is the enemy of innovation.   Sharp could have been complacent because of 

     their past successes in:   mechanical pencil, dyneradio, calculator, TV sets, LCD display

5.  Financial management:

    1.  No huge cap ex for a single product.  It has to be portfolio approach.  Let a hundred

         flowers bloom.  You are not sure of outcome of how you grow you flowers.  Set limits

         as we have seen in our own General Policies  No huge bet do not bet the farm 

         on single product.  

    2.  If it rains open an umbrella.  If you fail to make it in a quarter, ACT, DO                    SOMETHING

          Solve the problem.  Do it now.  Not later Not tomorrow.  Do it now

6.  Role of top management

     It is the duty of those who lead to learn good management practices.    The new president

     and chairman are partially responsible for the decline for the wrong decision.   We strive to

     stay on the business, "Give capable and intelligent direction in the management of the

     business because you cant afford to make such huge mistake that could mean the

     downfall of the company

     Thus:

     1.  Study the history of the past practices especially those that are documented on 

          how the past managers navigated the difficulties.

     2.  Study the current mistakes of contemporary mistakes of modern managers and how

         you can steer clear of their mistakes

     3.  Sharpen your critical thinking and improve your problem solving skills They can

          never be taught

7. Purpose driven organization;

   1.  The vision and mission statements define the purpose of the company.   We have out-

         lined this as part of memorialization business.  

 

Without a purpose, life is motion without meaning, activity without direction and events without reason. Without a purpose life is trivial, petty, and pointless.”

― Rick Warren, The Purpose Driven Life: What on Earth Am I Here for?

  2.  We have determined that:

      1.  We used to sell plots for cheap so that we can offer our more              gp services.

          (Are we achieving this??)

       2 Businesses that are supposed to supplement our revenues and that are supposed

          to boost our sales and collection  are not being sold and offered.   Something is

          very wrong.  This is the height of mismanagement

     

Attachments area

Preview YouTube video The 20 Year Fall of Japan's Sharp Corporation

The 20 Year Fall of Japan's Sharp Corporation

How come Japan is into negative territory?

Rizal Philippines
April 24, 2016

Japan has again fallen intor recession

Japan has been into recession (contracting economy) for several years now.  The President IMF, LaGarde is worried not so much with less developing countries but with Japan. Japans public debt is 237% of its GDP, the highest among developed countries - WSJ  Although yen is now the darling of world currency, she was worried about too much debt of Japan, although mostly yen denominated (US has plenty of debt too - almost trillion dollars)

And its giants like Nissan, Toshiba, and Sharp have been taken over by foreign partners.  Of late, Mitsubishi is in trouble because of its alleged cheating on emission tests (like VW)  Because of the recent earthquake at Kyushu, giant car makers Toyota and Honda have ceased production because of disruption of supply chain.

From Japan Times - Sharp and Toshiba face dire prospects

The combination of  natural calamities, (earthquakes) aging population plus mistakes in fiscal and monetary policies have brought Japan into this challenges.  Let us add management complacency and smugness.  The Japan tiger of yore has become slow, and probably unmindful of world developments which included China.  The Japanese management and technological prowess on Kaizen, QFD, Gemba, TPM 5s was overcome by cheap and mass produced products from China. Everybody was caught unprepared.

Some say that loss of entrepreneurship fueled by conservative Japanese banks who favored large and and ongoing concerns, contributed to loss of innovation and change in Japan.  The likes of Akio Morita of Sony and Konosuke Matsushita who were for sound management and innovation was gone.