Sunday, February 11, 2007

Blogging from OneNote

Three areas critical to leadership: Leadership development, Enterprise risk management and talent management

Alpha male syndrome: Alpha males (or females) have the features to become leaders; at the same time they carry with them alpha risks which can stall their careers. The features would be like confidence (-ve: arrogance), vision, hard working (-ve: expecting similar behaviour from sub-ordinates) etc. In a nutshell, if alpha liabilities are more than alpha assets they are not doing well eg. Michael Eisner of Disney, if vice versa is true, they make great leaders eg. Michael Dell, Kevin Robbins

Lean Manufacturing: A production philosophy that emphasizes on the minimization of use of all resources including time. It involves identifying and eliminating non-value adding activities in design, production, supply chain management and dealing with customers. It is an amalgamation of Just in TIme, Kaizen, Kanban and TQM concepts

Structured Notes: They are financial products that appear to be fixed income instruments, but contain embedded options and do not necessarily reflect the risk of the issuing credit. These options may be plain vanilla or they may be highly leveraged exotic options. Due to the fact that each one is unique, the risks inherent in any one structured note may not be obvious

Types of bonds: Callable, Puttable, Retractable, Extendible

For a start-up, three most important financing channels are: family and friends, trade credits and financial institutions

2003-2006 is considered a boom period for M&A. In 2006, the M&A amount almost reached $4 trillion with about 20% contributed by private equity and the rest by corporate funding. In the last 3-4 years, M&A has created more value to the acquirers. McKinsey has developed two scales: DVA and POP. DVA: Deal Value Added which means the increase in the market value of both the companies put together just after the announcement of M&A is made. Point to note, prior researches have pointed out that the announcement effect (price change immediately after the announcement) and the long term value created are positively correlated. POP, refers the proportion of companies overpaying for the acquisition. In the last 3-4 years, DVA index ishigh and POP is low which means M&A is creating value and especially to the acquirers

Fully owned or family controlled (with a substantial stake) perform better than fully publicly owned organizations. This phenomenon is particularly true in Asia.


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