There are many merits to taking a company public: prestige, a sense of accomplishment, publicity, and also the avenue for raising more capital. Condensed in the offering document are hours of laborious work invested by an army of bankers, lawyers and accountants. Despite the tedious process, many shareholders insist on taking this route. On average, bankers advising on an IPO generally communicate a timeline of between six to twelve months, subject to regulatory approvals and customary due diligence. In reality, this process could take up to two years and in some cases four years. The costs of going public could be so much more than you think. According to a survey conducted by PwC, more than 80% of CFOs commented in a survey that the one-time expenses relating to an IPO were in excess of USD 1 million. These relate to the engagement of law firms, accountants, a market study report, the book building and other miscellaneous expenses. The costs also vary according to the complexity in the company structure and the readiness of the company in terms of being compliant and addressing any queries from the regulators. As an example, the listing of e-commerce company Y Ventures on the Singapore Catalist last year in July 2017 grossed in approximately SGD 7.7 million in proceeds, of which the disclosed SGD 1.7 million went to listing expenses, making up about 20% of the total proceeds. While this could be an one-off case given the small size of the offering, average costs for public offerings of up to USD 100 million were found to be anywhere between 7% to 30% of the total proceeds raised. This statistic comes down to between 4.5% to 9.0% for deal sizes of between USD 250 to 500 million and 2% to 3% as we approach the billion-dollar range, which is fairly in line with market practice of advisory fees being 2 to 8% of transaction size. Post IPO expenses. Oxford Economics and PwC estimate that at least USD 1 million of additional costs annually are required to maintain a public company. The largest part of this goes into a more robust accounting and auditing process, but there are also additional resources that are required to be put in place such as investor and public relations, information technology and internal staffing costs amongst others. To put this in a financial perspective: If your company is performing at an annual run-rate of USD 50 million, this will put a dent of at least 2% in your net profit margin every year. Most companies are just not functionally ready. Most companies do not have the necessary resources for executing a stock exchange listing. For most, it is also probably the first time they are taking a company public.  Shareholders and management try to do a number of things to compensate for this gap – including hiring full-time senior professionals who have prior experience in capital markets (usually ex-investment bankers), assembling a team internally to execute the transaction and conducting a beauty parade to select the best bankers and lawyers to lead the process. On the surface on it, the deal could look well-orchestrated with an international line-up of the top firms. However, this usually results in an intricate mesh of numerous professionals with somewhat polarized personal agendas leading to overburdensome workload on the company’s management and IPO team as they try to coordinate the various working parties. If not handled well, this additional workstream will create undue stress on the operational team which should be focused on the day to day workings of the business. If you are a small to mid-sized company with a great product, solid business model, fantastic equity story and looking to raise capital for expansion, you are better off working with a strategic partner such as a private equity or venture capital firm who could potentially be more helpful in growing your business and sourcing for capital. If the IPO roadmap is something you must take, work closely with a trusted advisor right at the onset to minimize the need for mobilizing too much company resources and reduce decision fatigue for senior management and key stakeholders. As key issues in the IPO process get progressively resolved and transaction starts to take shape, the company can still onboard more banks to execute the book-building process.

If I had learned anything at all over the last decade of my professional life and investing, it is that banking is a transaction-based business. Year-end performance appraisals are evaluated almost entirely based on the number of deals closed, number of trades made, etc. Not that is not obvious but we subconsciously ignore this when it comes to investing. Much like brokerage firms, media works pretty much in the same way. Money is made on trades, and indirectly from viewership. Companies that provide news and updates as a service stay in business not because they help enrich your knowledge, but because someone is paying them in the hopes that you will act on that news, that you will make that stock trade, or that you will share it with someone else who might act on it. Those who a vested interest make money from your actions. Bluntly speaking, these companies profit from the influence they have over their customers. Once you come to understand this, stuff that you read online, you take with a pinch of salt, you analyze and approach it with a healthy sense of criticism (and sometimes skepticism). It will help you make better and well-informed decisions rather than acting on impulse. "Money is made in the sitting."

As an investment banker I used to work very long hours (and I still do) and we were almost always allowed to be reimbursed for dinner and transport expenses if we worked past a certain time (usually 9:00pm). Subway station at Fortress Hill Some times I would claim for these expenses, but other times I would not. And people found that puzzling. As I grew older and stayed longer in the office, I discovered that some of the most simple pleasures at the end of a hard day’s work was simply just to take a 10-minute stroll away from the office or use the public commute back home, enjoying the outdoor air in the process. Taking the taxi on the other hand constantly nauseated me because of the enclosure and motion. It was partly because of that, I did not usually claim for any transportation reimbursement. Likewise for meals and per diem allowances: Unless absolutely necessary such as dining with professional parties such as clients as part of the job, I would then claim for these meals. But I know of people who would go the full length to obtain all recoverable expenses as long as it was within the organisation’s HR policy. There’s nothing technically wrong with that. The rules that were set that way by the folks up there are also the same rules that are part of broader staff retention strategy, that is: To keep employees happy and contented so that they know they are well fed and taken care off. It was only in my later years in banking that I realised making these claims were also a deeper cultivation of a subtle employee-mentality . By attempting to ‘milk’ the system and extract the maximum benefits, one subjects himself/herself to the dependency on the little privileged comforts of life. There’s nothing wrong with that, in fact I believe the banks wanted you to do that. In Nassim Taleb’s words: “Someone who has been employed for a while is giving you strong evidence of submission. Evidence of submission is displayed by the employee’s going through years depriving himself of his personal freedom for nine hours every day, his ritualistic and punctual arrival at an office, his denying himself his own schedule, and his not having beaten up anyone on the way back home after a bad day. He is an obedient, housebroken dog.” So should one day I am unable to afford the ‘luxury’ of going home in a cab or rely on someone to pay for my meals, I would never feel insecure.

Bankers and financial professionals try to measure risk and returns using all kinds of academic and empirical bases - NPVs, IRRs, weighted average cost of capital, etc. I introduce to you a new way of looking at risk: How much are you willing to lose? Say you pay $10 to flip a coin. Heads: you get double the amount ($20), Tails: you walk away empty-handed. Now consider that it'll now cost you $1,000,000 to do this. Would you still take the chance? Mathematical models involving the calculation of risk disregards priorities and personal values. For many investment decisions in Asia and other emerging markets, the non scientific elements are often a huge part of what drives the deal. This is probably the single biggest reason why your complex DCF and bullet-proof-calculated discount rates don't weigh very much in this part of the world. Mispriced deals exist all the time because the stakeholders can't accept what they possibly stand to lose. Consider a scenario in which a business owner will never relinquish a partial stake in the company to an incoming buyer who has plans to break up the assets and change its corporate direction. Or a seller signing off on an under-valued transaction just to close the deal because he/she can't live with the possibility that there might not be another better offer on the table. All risk models break down when you have everything (or nothing) to lose. Managing it gets easier when you are more diversified and don't go to the negotiating table with an all-or-nothing mentality. The next time you are presented with an opportunity that offers a certain rate of return, think: what are you prepared to lose?

So time really flies when you are up about and at work. I would have been in Hong Kong for exactly 100 days tomorrow. Similar to what I usually do back home: I have my developed my own routine for where I grab my coffee (on weekdays and weekends). The baristas know what I usually order. I even go to the same places for lunch and dinners sometimes. Some form of routine is good I guess.

Best way to solve money problems at home is simply to earn enough. Make enough money and you'll never have any disputes. Use credit cards for day-to-day expenses. They rack up a ton of points which can be used towards discretionary shopping. Doesn't matter how much you save for retirement - the moment you stop working, you'll worry about running out of money. Better to spend money on stuff that you like than spend on stuff that you don't need. Eating out does not imply a luxurious way of life. Some people call this the "rich life". We splurge on eating out but save on fancy houses, cars and other stuff. Property today is no longer a good store of value. There are numerous costs - agency fees, duties, illiquidity, uncertainty over its appreciation in the long term. There are much better alternatives out there to give you a steady 5-6% annualized return over 20 years. Educate yourself on where to put your money. Financial markets are way more sophisticated as compared to 30 years ago. Today we have the ability to invest in stocks globally, a wide range of ETFs, index funds, etc. Worst way to earn an income is to work for a living. Learn to develop multiple income streams as you progress in life - the old school saying of "get a good education, get a good job, start a family, etc..." is out-dated. Invest in yourself. Wealth will take care of itself after that. Don't underestimate the power of compounding. A single investment (no matter how small) can change the course of your finances drastically. Aside from learning how to manage money, learn how to write and code as well. Sales is everywhere - learn how to sell and money will take care of itself. Money will only motivate you so far. If you are not doing the things you love to do, you'll burn out. 100% guarantee. The moment you feel that you pay someone more than what they owe you, you'll most likely end up spending the bulk of time chasing them for what they owe you. Most people who trade stocks lose money. Don't get sucked into speculation. The minute money is too easy to be made, it's probably time to get out. 99% of people who post images of their income online are not telling you something. Really rich and secure people don't flash their wealth and call themselves rich - not unless they are trying to sell you something. People who tip you off on a stock nearly always have something to gain from doing so. Don't be stupid and listen to everything they say. Use your own discretion to decide for yourself. Most of my losses are attributed from listening to others. Don't be envious of those who are ahead of you. You don't know what they've gone through. Bankers are not your friend. They do not care about you. Relationships are booshit. They are only as nice to you as the amount of assets you are banking with them. Don't keep too much of your assets in cash unless you know how you are planning to use it. Invest, even if it is a small amount.

Though hard to mathematically quantify, the truth is: Liquidity does drive a huge part of value. An asset is only as valuable as the next guy who wants it. Against the current backdrop of monetary tightening to fight inflation and funds becoming more cautious about investments, asset prices seem to have reacted and dramatically fallen. Growth is of course another key driver of value - which in this case, is being eroded by rapid inflation, adding to the further discount in asset prices. The double whammy here is that the same high growth companies that sold astronomical prospects of the future to investors will face the real test over the next two years as they fight against a policy that encourages the cool down of the economy. Is there a playbook to rectify this? Was it an error on the part of central banks [ 1 ] when quantitive easing was introduced during the aftermath of the 2008 financial crisis? Or did early adopters of bitcoin and cryptocurrency pre-empt the gradual erosion in the value of money correctly? I'm not sure. Most of the existing "money infrastructure" we know today have been largely built around a set of 'stable' long-term economic assumptions. For example, the capex for power grids and oil exploration have been traditionally modelled around $60 oil across ten and twenty-year exploration tenors. The value of real estate while are largely driven by interest rates, are typically also assessed on fairly long-term rental cash flows. Within the manufacturing space, the costs of erecting a factory are also driven by the visibility of future cash flows underpinned by revenue contracts over the long term. Even the concept of beta  in valuation quantifies risk by measuring the standard deviation of an asset price against a reliable index benchmark over a relatively long term dataset .   Most investment decisions tend to be long term because the world simply cannot absorb the sudden change in prices that would dramatically disrupt these economic models. Assuming that the immediate future would follow a reversion to the historical long-term would be borderline laughable given the current state of world affairs. So if we can't rely on beta and the pricing assumptions of today, perhaps the best thing to do is to probably wait it out until the world finds some sanity (and stability) amidst the current circus of events. [1] https://www.bloomberg.com/news/articles/2022-06-15/world-s-central-banks-got-it-wrong-and-economies-pay-the-price

The Hong Kong International Airport isn't what it used to be in the old days. No crowds. Only a handful of shops open. Lounges are dead. HKIA used to be a humdrum of travelers, both business and leisure. I used to look forward to the lounges (the Cathay ones especially) as they usually served free flow warm food, drinks, snacks, etc. The Pier at HKIA was a favourite go-to for its refreshing hot showers and Aesop scented shampoo and body wash. After that, I would settle into a bowl of hot wanton noodles from the noodle bar, extra serving of chilli, paired with either champagne or a can of Asahi. At times I would have someone from the dessert counter give me a scoop of vanilla ice-cream, then head over to the coffee bar and ask for a double shot espresso and pour it over to make an affogato . Then I would either get to work on my laptop at the bar area or just get some shut-eye on the couch. I could spend an entire day in transit at HKIA - and people would think I am crazy. Occasionally, I would even travel out of the airport into the city to meet with friends. Macau was also accessible straight from HKIA via a one-hour or so ferry ride. This was the Hong Kong that I was familiar with, at least from the perspective of an airport commuter. So you can understand why I was slightly sad and somewhat disappointed when I saw the nearly empty aisles along the departure gates at HK airport. Aside from the crowd, nothing much about the facade has changed except for some additional seating areas with charging points. These installations beside the travellator are new The city struggles having to deal with conforming to mainland policies (which is totally understandable), but at the same time, facing pressure to open up like the rest of the world, especially Singapore, its closest competitor. It is not an easy task. Every month, business and investor confidence in the city is diminishing. Whether it relates to the perceived lack of freedom, uncertainty around propaganda from Beijing or the draw of spacious living, companies can always find a reason to jettison Hong Kong for Singapore. It is odd for me, speaking as a Singaporean but I actually am rooting for Hong Kong, in a healthy competitive way. Hong Kong is probably the last frontier for China's position as an international gateway. Despite its current sovereign ownership, it's colonial legacy and history is what gives Hong Kong its uniqueness - the ability to harness the vast potential of the Chinese market and combine this with the best (or widely accepted) practices of the West. And if you think about it, this is actually very similar to Singapore. Singapore surely has Southeast Asia as its playground, but Southeast Asia as a market dims in size significantly to China. Its diversity of language and cultures, unlike China, makes it more difficult to penetrate and navigate the ground. As big as China is, its socialist-driven economy incorporating standardization and uniformity is probably one of its biggest selling points. For example, you could hire a Chinese-speaking person, parachute him/her anywhere in China, and can be assured that he/she will be able to navigate the ground with relative ease. But you can't do the same with Southeast Asia. To master the Indonesian market you need a native from Indonesia who understands not only the language but the customs. Likewise for Vietnam, the Philippines and Thailand. The ASEAN bloc as a whole works well together because we collectively thrive on regional common interests. But to succeed in each market independently, we need to dedicate resources specific to each country. Besides, to win in Southeast Asia, you can't afford to focus just on one country. Even the biggest and most successful startups in the region have expanded their footprint beyond their home country. After Indonesia, GoTo has set its sights on Singapore, Malaysia and the Philippines. Despite making a name of itself in Malaysia, Grab has expanded into other key markets such as Singapore, Indonesia and Vietnam. Yet, even as successful as these startups go, Southeast Asia as a region still falls behind significantly in size to China. Over one billion people in China over the last few decades have been reading more, spending more, investing more, and consuming more. And in recent years, the flurry of venture capital and private equity money into Southeast Asia, lifting overall valuations, has just made it increasingly difficult to find a rich exit in a crowded market. Everyone is waiting eagerly for COVID restrictions in China to open up and for trade flows to resume. Guess which city will be the biggest beneficiary of that? It is perhaps simply just all a matter of time. Make Hong Kong great again.

For most parts of my banking life, I've worked out of communal spaces in which senior directors sit out in the open and fraternize with the rest of everyone across the ranks. There weren't many physical boundaries. Everyone works out of a common row of desks or cluster of cubicles. When a director needs some stuff to be done, he/she just gets up, walks a few steps over to the analyst's table to talk. It was the same for some of our clients. I recall the Chief Operating Officer of an airline company we were advising sat openly in the center of the entire office. No walls, no barriers, just a table with a desktop computer and stacks of documents. When I asked them why they had arranged the seating this way, they said it was to ensure the key person is readily accessible by everyone in the office, much like the control tower of an airport. So it takes a bit of getting used to when I get to sit in a glass box. An example of work cubicles during my banking days While I don’t see this as a privilege, there is indeed a price for people who sit in a glass box. There are unspoken ‘expectations’. Expectations on capability, responsibilities, and many more. People sitting on the outside usually see those sitting on the inside as ' senior management' regardless of whether they really are. So what makes management a good management? Over the last couple of years, I had been reflecting and discovering through interactions with different people, pondering - what makes a leader outstanding, how do people acquire the necessary management skills, and if business schools really provide any tangible knowledge on this. After all, there are many academic modules covering organisational behaviour and strategy. There are also many case studies drawing references to notable thought leaders and practitioners: Peter Drucker, Michael Porter, Jack Welch, Bob Iger and many others. It is refreshing to read about them along with a wide variety of insights from their accumulated experiences. But the application of their management expertise in reality is much more difficult. Since I started working, I have had opportunities to try my hand at management. I also had many opportunities to observe from a third-party's perspective how line managers and their co-workers try to navigate these. Not all leaders manage their teams well, and most employees never have good feedback about their bosses. Year end performance appraisals for most are almost always never excellent since the bar is either usually too high or the outcomes are assessed on a bell curve with only being able to achieve their targets. At times, I wonder if there are any perfect solutions, and who decides whether management styles had been effective. Just get it done. Perhaps the most important principle is to deliver. Results are basically everything: Revenue and profits. Quantifiable metrics are not only tangible, they are observable and most of the time hard to refute. To contextualise this to military ops: The mission is everything. The spirit is: If it needs to be done, it will be done . And you'll do whatever it takes to get the job done. "Being a leader isn't about ability. It's about responsibility." - Colonel Iverson (The Core) I've seen too many managers try to impress, in different ways. They try to look the part , exert authority, flaunt their past experience or pedigree background. The reality is that most people, especially employees, only care about ability to the extent it affects their bonuses or whether or not they will need to work overtime. Looking good is overrated. Responsibility is not about taking credit but mostly also about the taking the rap when shit hits the fan. You will look stupid screwing up or when someone in your team screws up. But that's part of the job that no one tells you when you become a manager. It's not about taking credit for good performance but also 'taking credit' for the slip ups. Responsibility also means developing the technical and personal aspects of the people around you. By helping those around you, you are indirectly relieving yourself of unnecessary management work freeing up more time for doing the more important things and in the process delivering the point above on getting the job done. The office environment is full of " Do this ", " Do that ". One of the things I like to ask after any meeting or conference call is: " what do you think? ". Because no one, especially in the junior ranks, expects their opinion to be taken seriously. Most of them believe that it is not in their place to make decisions. This mindset, if not managed well, can lead to prolonged apathy at the work place, overburdening managers with decision making, which may not always be the best judgement. This is also how good corporate culture gets destroyed. Employees at the workplace get increasingly disconnected because " no one listens to me any way ." I am genuinely interested in developing colleagues and staff - across all ranks. Money aside, there is no better satisfaction of seeing how someone goes out of his/her comfort zone to overcome their limitations. This can even be as simple as delivering a presentation, facilitating a conference call or even achieving a breakthrough in a seemingly impossible project. It is also very encouraging to see managers get excited brainstorming on a new strategy, daring to experiment with possible solutions, not being afraid to try, and perhaps more importantly, not being afraid to fail or look bad. After all, we are all about just getting the job done aren't we? Management is: Get it done, follow-up, discipline, planning, analysis, facts, facts, facts. It’s [getting] the right people in the room, kill the bureaucracy, all of these various things... ...Humility, openness, fairness and being authentic are most important – it's not about being the smartest person in the room or the hardest working person in the room. - Jamie Dimon, 2020

A convertible instrument is both a liability as well as equity. Accounting for it as a liability requires us to look at this instrument in the form of debt . To value debt, we discount all future interest payments and the principal repayments using the coupon rate to arrive at a present value . The present value of these cash flows are lower than the face value of the size of the CB because of the discounting effect. Hence, the difference between this present value and the face value of the CB is gives its corresponding equity value . But why bother splitting up the liability and equity components? Say a fast growing company is looking for additional funds to expand its business. The owners do not want to raise equity because they prefer not to dilute the shares of the company. One option would be to borrow a loan from the bank, and for simplicity, let's assume that the bank quotes them an interest rate of 12% . Plain vanilla bond @12% interest rate Alternatively, the company could also raise this money by issuing a convertible bond , which allows the company to offer fixed interest payments, while providing flexibility to convert the principal into shares of the business. Investors can enjoy fixed income from the CB's interest payments (the debt portion) while getting potential upside should the company do well (the equity portion). Comparing this structure with the 12% cost of funding of the plain vanilla loan, how should investors price the CB? Because the company is allowing investors to potentially benefit from having a share in the business, there has to be some trade-off when comparing this funding option to a simple loan. And it only makes sense to issue a CB only if the interest rate is lower than 12%, right? Ok let's assume the CB is priced with an interest rate of 8%. Before the loan gets repaid or converted, the way both debt and equity components at the onset could look something like this: Convertible bond priced at 8% but with equity upside To correctly value both the CB's equity and liability at the onset, we first treat the debt component in a CB like a plain vanilla bond, using the 8% interest payments as cash flows but discounting it with the 12% interest rate of a nominal plain vanilla debt : So at the onset, the value of the CB's equity would simply be the difference between the the issue size of $1 million and the present value of the debt component cash flows. The behaviour of a CB. It is also logical that for every year the CB is not converted, the liability component increases, converging towards the value of the principal i.e. the amount that needs to be repaid upon maturity (just like a debt obligation with a 12% cost of funding) . Note that over this period, there is no change in the equity value of the CB. The cash flows of the liability component  over five years would look like this: For every year that the CB does not convert, the 12% interest (costs of raising a plain vanilla debt) is accrued (not paid ) in the income statement, flowing straight to the company's retained earnings. Now let's look at the alternate scenario in which investors swap the CB into shares. And let's assume this happens at the end of the third year . Executing a debt-to-equity swap in year 3. At the end of year 3, the liability component " zerorizes" due to the swap and the principal gets converted (capitalized) into equity on the books. A share premium (equity) get recognized as part of the conversion . This premium is computed as the difference between the issue price of the CB and the outstanding book value of both the liability and equity components at the point of conversion 144,191 + 932,398 - 1,000,000 = 76,589 Simply put: The equity premium reflects the perceived "benefit" in raising a 8% CB vs plain vanilla debt at 12%. Editable worksheet:

A copy of the bible can often be found in the drawer of the bedside cabinet in most hotels. Like most travelers, I casually ignore this, partly because I don't have any affinity for the bible, but also because I tend to overlook and treat it as part of the hotel room fittings (apologies to the folks at Gideon International ). So as I was searching for some writing material in my Marriott hotel room in Shanghai, instead of a bible, I stumbled upon a book titled " Spirit to Serve - Our Stories" . The book basically showcased the lives and experiences of various hotel employees from all over the world, each summarized with a caption and a 1 to 2 page writeup. I am not usually fond of reading corporate marketing material but ended up flipping through the pages. Inside were interesting stories about Marriott's employees - from hotel managers, room attendants, concierge staff, chefs to butlers and bellboys / bellmen. One of those stories included a head bartender who moved from Cambodia to Washington DC more than 30 years ago and he described how many memorable friendships were forged with the returning guests. There was also a story about a mother of four and how she juggled work at the hotel and family time at home. I found many of these stories intriguing and ended up going through most of them. Towards the end of the book, I came across this afterword which I thought was quite meaningful and that it should have been placed right up front: The Twelve Rules of Success Continually challenge your team to do better. Take good care of your employees, and they'll take good care of your customers, and the customers will come back. Celebrate your people's successes, not your own. Know what you're good at and mine those competencies for all you're worth. Do it and do it now. Err on the side of taking action. Communicate. Listen to your customers, associates and competitors. See and be seen. Get out of your office, walk around, make yourself visible and accessible. Success is in the details. It's more important to hire people with the right qualities than with specific experience. Customer needs may vary, but their bias for quality never does. Eliminate the cause of a mistake. Don't just clean it up. View every problem as an opportunity to grow. I have stayed at my hotel in Hong Kong for nearly three years now. Truth be told, the guest-facing staff hasn't changed that much. In fact, most of them recognise me, even if I had gone on an overseas trip for a long time and haven't been back for weeks. I know this because they always pass me my courier packages as soon as they see me step in through the main lobby entrance. In fact, some time back, I heard that it is quite common to see hotel employees working with the same hotel for more than twenty years. I don't think many of them are paid top dollar, and the skills for the service industry are somewhat transferrable. On the contrary, for many white-collared jobs, it is relatively more commonplace to see people moving around only after a few years. So it got me thinking: Assuming we say that Marriott is a successful brand / corporation, if it's not about the money, then what keeps these people working at the same place for years and even decades? Is there a hidden incentive scheme that I am unaware of? Or is it the familiarity of the environment? The social support that comes with forging familial relationships with colleagues? A genuine sense of satisfaction from a customer service role? A good line manager? Or is it mostly just a lack of better options out there? For corporations that are religiously fixated on pursuing performance and the bottom-line results, have they sacrificed some aspects of their corporate branding and employee loyalty in the process of being successful? "Today's analysts will be tomorrow's managers. Today's managers will be tomorrow's Vice Presidents. Today's Vice Presidents will be tomorrow's CEOs and business owners."

During the initial years of starting IJK, we had contemplated re-locating me from Singapore to Shanghai. It would have been a huge move. It had also been a natural and strategic option. China was a huge market and we thought we had what it took to succeed in that market. But China has been relatively outside my comfort zone, not only in terms of the language but more so because the resources that I had mustered over the last ten years at that point of time were all within Southeast Asia - The connections, relationships and appreciation of the culturally diverse landscape. In short, I felt that I knew relatively better how to navigate in Southeast Asia as compared to China. But China as an economy was the largest in Asia compared to the playing field in Southeast Asia. It was hard and impossible to ignore. I made that decision not to re-locate, staying put in Singapore while spending the next four years shuttling in and out Shanghai and many other cities, making stopovers in Hong Kong. By early 2020, our startup journey had taken us to Moscow, Saint Petersburg, Seoul, Riyadh, Astana, Budapest...the list goes on. As for the adventures we had over those 4 years, those stories are for another day. I never posted any of those trips on social media. We had travelled to many exotic places and I got to know many people whom I would have not met if we never started this business. More importantly for me, I succeeded in breaking away from the comfort zone I was in as an investment banker, the typical grunt of an employee. While I had picked up most of my accounting knowledge, financial modelling and structuring skills in a formal professional setting, I really only learned how to set up meetings, present ideas and sell when I became a business owner. These are lifelong skills that cannot be taught and follow you around for a long time. Look, the point here is not about the fancy globetrotting or the invaluable lessons learned. There is also no success story to tell. At the risk of being overly blunt and transactional: The business acquaintances and relationships acquired only make sense if you can convert them into fees at some point of time. The cash flows (if any), only sustain you for a finite period, and then you have to look for the next elephant to bag, and the next, and so on and so forth. The truth is we paid for many of these business expenses without getting anything in return. Many people choose to interpret and believe what they see on the outside. It’s not as good as it sounds. There is no glamour in running your own business. It is more like living life in a constant state of uncertainty. And when you are in a constant state of uncertainty, it gets difficult to plan for anything long term. Then at the end of 2020, in a twist of an opportunity, I made the decision to relocate to Hong Kong, taking that uncertainty into a whole new dimension. Over these last two years, many friends have asked me how I cope with living overseas for an extended period of time away from home. All I can say is that it is not as easy as one might think, even for those who are accustomed to frequent traveling for business. When I think about it, the people who travel and live overseas for work generally comes down to three buckets : Those who relocate early on in their lives either for study or upon graduation; Those in their mid-careers who relocate for work as a temporary arrangement and; Those in their mid-careers who relocate indefinitely. I have many friends in the first bucket . They had gone over mostly upon graduation and have called those cities home. Those I know have stayed overseas for easily more than ten years. They had built their social ecosystems and familial support there and did not have to uproot anything back home or had little to nothing to give up. For them, life started overseas . Those in the second bucket are slightly older and had more work experience. They had gone overseas midway into their careers or got seconded as part of a project. In nearly all of the cases I knew, there was always clear visibility in terms of when they were going back home, be it two years, three years or five years. There was always an end goal . Something to look forward to so to speak. Then there are those in the third bucket . I know of very few people who are in this bucket and they are mostly in C-suite positions. I sometimes wonder how they do it. How they manage their families at home is a miracle in itself. You can only truly empathize with this if you are in this bucket. The thing is: When you already have a life back home, relocating overseas for work indefinitely is much harder than it sounds on paper and what you hear from others. A lot of people take it for granted because they either feel that the remuneration package compensates for that inconvenience or they simply just think they are adaptable enough. But when you take a step back and really evaluate the circumstances that could potentially impact you - the distance, the unfamiliar environment, the lack of social and familial support, there is always a chance that you over-estimate yourself. The real question is: Money can only go so far in helping you settle the logistics of moving, but how does one psychologically prepare for and cope for the change to a new environment?

It's just been over two months in Hong Kong and I have already developed a routine sufficient for baristas to know what coffee I typically order. The speed at which the orders are processed is impeccably fast. It takes only less than three minutes to do up a vanilla latte at Pacific Coffee Company at Lippo Center. Things in Hong Kong somehow move incredibly fast. The shop just below where I stay even knows what I typically order for takeout: Basil pork rice or Hainanese chicken rice. Oh, and Chicken rice tastes slightly different over here, it done slightly Thai-style, nice, but just different. As I grow older, I feel that routine becomes increasingly important. Whenever I am overseas I tend to wake up significantly earlier as compared to being at home. I treasure the moments of making my way to the usual coffee or confectionery place to start the day, regardless or whether it is a working day or the weekend. I enjoy simply just sitting there, relaxing and basically do nothing but unwind. This is very likely a habit had was cultivated early on during the downtimes of my national service days where I mostly hung out at Coffee Bean during the weekends. To date, I spend most my time on the HK island side, occasionally making trips to Kowloon on weekends. I hardly venture north of the area past TST (not sure why). I hear that there are many nice eateries in the area but it can be difficult to get seats especially over the weekends. Admiralty and Central have become synonymous with work. They are nice places to go over the weekends because it tends to be less crowded, but I still find it hard to look for places to sit down for a cuppa. Comparatively, Sheung Wan is a lot better, especially when you venture further south of the island (further uphill) . My go-to place is Halfway Coffee which is located along the street selling Chinese antiques. It is frequented by ang mohs (or gweilos at the locals say) and mostly the affluent local community in Hong Kong. Halfway Coffee at Sheung Wan Perhaps one of the biggest differences for coffee and general dining here is that prices are way much higher (a black sugar latte sets me back by about HKD 50 or roughly SGD 9, which is nearly 70-80% higher than similar artisanal coffee in Singapore). I haven't tried hiking yet although I have heard much about it but maybe I'll do so towards the end of the year when it's cooler or when I decide to break out of my routine of weekend coffees.

The Lamborghini brand sixty years ago was not known as the luxury car brand it is commonly associated with today. They were actually well-known for making tractors. Apparently its owner Ferruccio Lamborghini was unhappy with the fact that the clutch on his Ferrari car wasn't working as well as he expected and decided to give this feedback to Enzo Ferrari , who tells him off that he is better off sticking to manufacturing tractors. Insulted, Ferruccio later went on to build the first Lamborghini supercar a year later. Fast forward a series of technology innovations and many years later, both Lamborghini and Ferrari are now associated with the league of prestigious car brands. So when Apple announced last week that it had hired someone from Lamborghini to lead its electric vehicle program , it got me thinking: how does one go from high-end consumer products into cars? And is that even possible? Why would any veteran in one industry and who has spent the last few decades of his life working in a zone of familiarity jump into a totally new business? Can you imagine the kind of conversations he would possibly be having with the engineers on the ground? Calibrating watts to kilowatts . Migrating from working with small iPhone and Mac enclosures to designing large car chassis. Not to mention, ensuring the religious compatibility with the entire Apple ecosystem, which I am sure will be an important consideration in the design process. This guy has to basically get management's buy-in to look at and potentially execute things in a whole different way. So how do you convince someone who has done things a certain way their whole careers to get out of his comfort zone and embrace a whole new ecosystem? Say if this initiative was championed by another company with a brand and scale much smaller than Apple, would they also be able to headhunt and convince someone of a similar calibre to drive this innovation? The importance of a virus. A friend once commented the use of " virus " having a negative connotation. I don't really think so. Businesses in their early phases struggle with sourcing for capital and achieving profitability. But once they have crossed that chasm and survive, they then have to deal with grabbing other important resources such as attracting and retaining talent. You can always use capital to buy talent. But to keep talent, you need more than just money. You can retain the existing employees and management teams that have been comfortable with a certain way of doing things, keep the status quo, and you most likely continue to survive. But to get to that next level, you will need introduce a change agent , a different way of looking at things and someone who dares to challenge conventional wisdom. I like to think of it as introducing a virus to the system. Vaccines work in this way: Introduce a foreign agent to the system, a dose small enough without killing the host, allowing it to learn and adapt. There will be discomfort. But over time, the idea is to acquire immunity and become stronger. Professional experiences, both good and bad, follow a person around for a long time. Well established companies like Apple have better leverage over smaller companies to attract and inoculate talent because of their brand equity . Branding doesn't necessarily apply only to consumer or retail facing businesses. It is how people outside the firm view the company - the customers and suppliers (existing and future), as well as employees: past, present and potential. Are existing and past employees proud to say that they have worked at a particular firm? Despite the expected grunt of having to work long hours under tremendous pressure and high expectations, do they feel a sense of accomplishment and pride after leaving the firm? Do these people feel like they have learned something or contributed to something during their stint within the company? Do past employees simply drop off the radar once they leave the company or does HR make it a point to keep it touch with them? An example of those who make it a point to keep in touch with past employees or alumni include KPMG , Goldman Sachs , McKinsey , the list goes on. Most alumni who reminisce their time within the firm over drinks tend to mostly remember the struggles, the tough times and the nasty people. For good or for bad, these moments represent shared experiences. And no matter what kind of impact it has left on them, these shared experiences inevitably shape their professional outlook and approach towards their future careers. Those experiences and intangible skills acquired form a sense of identity - much like how people feel a sense of loyalty to their countries although the majority will continue to complain about taxes and how their governments are not doing enough to help them. This sense of identity in the context of the corporate world is basically brand equity . But how do you nurture brand equity? Encourage people to embrace discomfort as a normal Dare to try (and fail) attitude - don't over-penalize for the lack of results from trying, penalize for the lack of trying. Encourage idea generation and reward execution - it's good to have ideas, but remember that execution is everything Hire well - Test for ability and skills, but once employees and managers come onboard, be genuine in understanding what drives them deep down and make an effort to help them achieve their personal development goals All employees (past & present) are brand ambassadors for the firm. It's ironic that a lot of firms invest relatively more time to ensure that they hire well but spend so little effort when the employee is formally onboarded and during their exit from the firm. Never under-estimate how much advertising (good or bad) employees can do when they are no longer at the workplace Customers, suppliers, employees and basically anyone who comes into contact with the company directly or indirectly needs to form an impression of the business that resonates with its values and corporate culture. But culture cannot be built overnight. Like a good habit, it is formed from months and years of iterating and improving. A distinctive company culture sticks long after employees have come and left. And with all things in good time, culture becomes brand equity. " We only incentivize performance " - that's impossible... performance is a result. You can only incentivize behaviour. And so the best companies are aware of their own values... and build a culture around those values. The ones that go toxic, they forget about those values, they think it's performance at all costs. " - Simon Sinek Any new product or venture has risk, but beyond a strong balance sheet, the companies who are most genuine, willing to adapt and embrace change with a little discomfort to build a good culture and brand equity will find themselves in the best position to attract talent and succeed in the long run. "Invest always - and above all - in people Better to give talented (if unproven) people a chance, and endure a few disappointments along the way, than to not believe in people. The number one ingredient in their secret sauce is an obsession with getting the right people, investing in those people, challenging those people, building around those people and watching those people experience the sheer joy and exhilaration of achieving a big dream together. And, just as important, stay with your proven people for a long time. " - Jim Collins [Disclaimer: I hold shares in AAPL] [The story of Lamborghini and Ferrari can be found here .]

I conclude. Without a doubt. That the McDonald's double cheeseburger. Is the best cheeseburger in the world.

It has been a relatively productive two weeks in Singapore. Most of the conversations I have had ranged from my life in Hong Kong to opinions involving the current state of affairs in China. A few common themes consistently came up and I thought it might be a good idea to summarise them here. China will open up eventually. There is no denying that supply chains, the over-leveraged property sector and the broader economy has been impacted over the last two years. This has likely resulted in a slowdown of the economy (though hard to scientifically verify if any of the public disclosed figures can be relied on). There's a lot of noise involving the recent protests, possibility of further lockdowns, and speculation over when travel will open up. But no one really knows. The concern over handling foreign infections is understandable given that China has over a billion people. Just imagine the toll on healthcare infrastructure if a billion people went to the hospital at the same time. That being said, we can be sure that China will eventually open up. The country's interest for doing business with the rest of the world remains intact. There is no way to prove this and unfortunately waiting too long also means higher costs for businesses. Changing population demographics. A changing demographics and mindset is shaping the new world economy. Persistently high youth unemployment rates is posing a longer term problem for the economy. The tang ping 躺平phenomenon has obviously been one of the catalysts. But the contraction of jobs supply is partly also due to the crackdown on big tech and edu-tech over the last year, the imploding of the property sector, and the more recent cost-cutting measures observed in various household tech giants such as JD.com and Sea . There is also less profit-driven motivation (or greed depending on how you look at it) to excel in life. Call it the successful result of pushing for common prosperity (共同富裕) or simply renouncing the lofty desires in life (看破红尘). Young people are increasingly comfortable with getting by doing the minimum. This is a generational paradigm shift that is taking place not only in China, but many parts of middle-class Asia as well. The beliefs and values of those born before the 1980s have been mostly shaped by the need to have a good education in order to secure a well paying job. Having gone through the dot-com boom and bust, the Asian financial crisis and globalization. Hard work has been taken to be the 'holy grail' for being successful - success in life being largely defined as having a high paying job, even at the expense of sacrificing personal time and working long hours. Hard work correlates to wealth, which buys a roof over the head and some financial stability. And the results have been evident over the last 5-10 years as seen in higher income levels. Economists in Asia have previously also touted the emergence of Asia's middle class, in which the rising affluent population (especially the Chinese) were expected to spend more on lifestyle and luxury. In a recent weekend coffee catch up with a friend, he mentioned an interesting observation: Setting aside the affordability of buying a home, it is actually a lot easier for young people today to get by. In Japan, Korea and China for example, there are tons of convenience stores for getting decent hot food and supplies. There are shops like Uniqlo and MUJI for clothes, and "dollar stores" such as Daiso and JHC for incredibly cheap household stuff. If you are willing to forgo the luxurious brands, you technically don't have to dig very deep into your wallet to live comfortably. It is actually very easy for people to 躺平 and give up on the ”high life". From a capitalism point of view, this is obviously bad for the country because growth has traditionally been associated with increased spending, and not about being contented with living the simple life . And while US and the rest of the world are hiking rates to fight inflation, China by contrast is doing the opposite. By cutting domestic rates, the Chinese government is probably adopting the age-old "inflation targeting" monetary policy to rejuvenate economic growth and avoid stagflation. A new new normal. The narrative on the outcome of China's recent party congress meeting is obviously extremely divided, you either love it or hate it. Some of the peers I spoke with see XJP's next 10-year rule as an iron-fisted style of governance. While it might appear as if too much power is in the hands of one person, this continuity also implies a certain stability in policies, which can be a good thing in today's volatile markets. The so-called 'strong fisted' ruling also means that privately owned enterprises who work more closely with state-owned-enterprises could be seen as a more 'friendly' party aligned with national policies under the current regime. "I believe China is currently in the range of 3 to 5 percent growth, and headed rapidly to zero" - Politico.com In 2016, when the term " new normal " was first introduced at China's 13th Five Year plan, there were several opinions hinting that one of the world's largest economic engine was rapidly grinding to a halt, including the possibility of a catastrophic outcome. But an article published in Fortune put this into perspective: " The slower growth rate is a sign that China’s enormous economy has passed the startup stage and is beginning to mature. While this is certainly a new environment for investors to wrap their hands around, it doesn’t equate to economic Armageddon. " China and most of the global economy continued to thrive in the three years that followed, right up to the pandemic in early 2020 which took the whole world down. What doesn't kill you makes you stronger. Maybe that could also be what the world needs right now: To be less pessimistic and gradually learn to embrace a second new normal of a controlled (or regulated) market economy rather than a free market economy that is jacked up on steroids.

In aero-propulsion engineering, it has been found that the most amount of fuel per kilometer is burned when a plane is taxi-ing and taking off , not when it is cruising in mid air. It takes the most amount of energy for a plane to break that initial resistance, to move, to reach escape velocity and to eventually fly. When assembling a team to build a new product or a new business, all members must have the ability to overcome that initial resistance. And the truth is: If you are building anything new, you are always going to face resistance .  The team cannot be complainers. They cannot keep lamenting on the fact that this is a new market, a new product, or that there are simply not enough resources and internal / external support to do whatever they need to do. They certainly also cannot be wasting time putting together slides to explain in ten different ways why something doesn’t work, or why it cannot be done. They neither feel victimized nor do they spend time assigning blame.  They just get it done. There is no room for excuses, because that’s the only way to break that initial resistance, that is all there is to it.

I used to played a lot of basketball in school. Basketball is a fast-paced game that embeds a lot of strategy. A team of five on each side can come up with numerous ways to score within a 24 second time frame. Everyone on the team has a role - the point guard, the power forward, and the center. Street basketball sometimes involved three-a-side on a half court, and given my height I was always told to play the center position. The center position was important. When you are on the offense, the center serves as a back-up to do a rebound if the point guard's shot is off or if the power forward needs support while doing the lay-up. When you are on the defence, the job of the center is to be the sturdiest pillar under the net, blocking every shot that comes your way and turning the play over. But I hated playing the center. It was a boring position: standing under the net, constantly looking up and pivoting around a 1-2 meter radius. Sure enough I might be able to get the rebound most of the time but there was not much fun in catching the ball and then passing it on almost immediately. So I always preferred doing the layups, occasionally shooting from the 3-point line, mainly for variety. I would sometimes get told off for not staying in my position. I wasn’t trying to be ‘showy’ or anything, but simply because I enjoyed the momentum and dynamic game play as compared to relatively standing still. This ‘rigidity’ took out a lot of the fun in competitive basketball playing and I eventually found my way in athletics. Much later on, I realised that a lot of school teams select their center positions primarily based on height. The idea was that even if that person had no ball-sense but had the height, he could be trained to do what he was supposed to do. Grunt of the firm. The running of businesses, especially for employees, unlike a basketball game, may not be that enjoyable. But like basketball, companies need to assemble a spread of people based on different functions and positions - rainmakers, executors, administrators and grunts. Last week, I had someone in the office telling me how frustrated she was over doing something she felt was unnecessary and that the exercise yielded no value. “I don’t like what I do, but I have no choice.” Many employees don’t like their day jobs but a lot of them in this category feel disgruntled primarily because the work is not fun, they don’t see the point of what they are doing and often perceive it as stuff that needs to be done in order to report to the higher-ups. This employee was the grunt of the firm. And despite her lack of experience, she was generally good what she does - accountable, hardworking, and diligent. She does what she is told and sometimes goes the extra mile to get it done even on a weekend. Now and then she wants to be able to see the big picture, the significance of what she is doing and be able to learn something in the whole process. But the reality is that, sometimes the things we do at work that seemingly make no sense need to be done because only those with real skin in the game says so. Such is the reality of a lot of working environments. I don’t like playing the center position but the team simply needs someone there to just hold the line. Sometimes a small nudge in the mindset can change the perspective of how people can approach work and carry on their day-to-day jobs. As part of any job, sometimes it is unavoidable that you have to do the things that you don’t like to do. Because a lot of employees don’t condition themselves to seeing things this way, they often get upset, feel unappreciated and eventually leave. Employee attrition can go down like a negative spiral and be a big problem for companies. Right fit. Managers can obviously do a lot more to understand the attitude and personalities of their employees. Too much focus is placed on hiring for skills rather than personality. Sure enough, a lot of companies include “ cultural fit ” as part of their hiring criteria but in today’s context, remote working and high employee turnover is increasingly becoming the norm. In the past, “right fit” means placing someone in the organization who would ideally jive with the rest of the team. In companies whereby departments are constantly being refreshed with new faces, it can be difficult to foster any real camaraderie . I once overheard a senior colleague in an interview asking a potential hire: “Are you prepared to work long hours?” It got me curious because I wondered what response he was expecting to hear from such a rhetorical question. If the candidate gave a brutal reply insisting on doing regular hours, would his honest preference imply a lousy fit for the company? And if he/she answered ‘ yes ’, wouldn’t that be pretentious? As hiring managers, what are we really trying to look for in a candidate's response when we throw them questions like these? Just as all basketball teams want the tallest, fastest and the best shooters, all companies want the most hardworking, the most resourceful, and innovative people (ideally at a fraction of the cost). In a certain extreme, companies simply want corporate slaves working in a manufacturing sweat shop . This is mathematically speaking, solving for maximum P&L but does nothing to improve corporate culture. To make it worse, the Internet has also virtually created a 24-hour work day, resulting in a term called neurofacturing , which basically refers to the modern white-collared jobs involving technology and brainpower. The Atlantic has an interesting article that talks about why people spend all day at the office working. Do candidates who claim that they are willing to embrace the long hours make better employees? Companies tend to be somewhat myopic when hiring, focusing on either the highest " neurofacturing capacity" or filling immediate human resource gaps such that they almost always overlook the candidate’s interests and ambitions. After all, why does it matter? Just think about it: How many of the interviewers that you’ve met previously really took a genuine interest in your long-term career aspirations? Aside from the long working hours which seem to be mostly a given now, most of the questions directed at you probably test for experience and skills: “ Can you tell me how to value a company? ”, “ Can you do this? ”, “ What have you done before that convince us you can do this? ” The idea that if someone has had success in his or her previous stints, there is a good probability that they will be able to replicate this in their future roles. But this is not always the case. “History helps us calibrate our expectations, study where people tend to go wrong, and offers a rough guide of what tends to work. But it is not, in any way, a map of the future. - Morgan Housel If companies could focus on aligning corporate goals with the ambitions of their potential employees, imagine how much impact that could potentially have on productivity and culture. Instead of searching for the best match of skills and experience in the relevant industry, one could consider placing more focus on hiring for personality. For example, someone who enjoys talking about everything under the sun could be a fish in water for a sales role. A perfectionist could be a good managerial hire for a public relations role whereby collaterals need to be impeccably produced. Or someone who has previously attempted a failed start up could also be the best choice for a corporate venture role as he would be prudent and sensitive to the nuances of launching a new product, having gone through it first-hand. Hard technical skills can be trained but interests and unique experiences remain more deeply ingrained in a person’s DNA. Furthermore, people generally don’t like to be told what to do because it makes them feel like they are not in control. Instead of free will, they feel like they have been given no choice even though they might have been happy to go along. [ Jonah Berger ] People produce their best work when it interests them. Companies use incentives such as money, hoping to channel and convert some of these personal interests into their commercial interests. No fault in that. But to do so requires some work in understanding what drives these people.

Examining financial statements can be tricky and tedious. "You don't have to have every single answer. It doesn't matter how many blue trucks a company owns. More important is what can you do in the business, in the the 20% that will really drive the results and drive the outcome" - Talks at GS, Henry Kravis From an accountant's point of view, the ledger has to be always complete and accurate, even if it means laying out a few hundred lines of items. From a banker's point of view, we tend to be only interested in the top 3 to 5 items that affect the top and bottom line. There is always room for uncertainty and nothing is ever absolute. Unlike accountants, we talk about numbers in ranges and what-ifs . Nothing is ever precise. Sometimes we bankers talk too much as well. There is a lot of art in balancing uncertainty and precision when it comes financial modelling. One must be careful to avoid being caught up in too much detail such that it hinders decision-making and deviates from what we hope to achieve from building the model. This is where the 20-80 rule is useful. This rule can apply to cost cutting initiatives too. Conventional wisdom and numerous precedents dictate that the elimination of jobs should start at the top where it takes up presumably the bulk of costs. But removing the top brass could be potentially detrimental to an organization, especially if senior managers are instrumental in steering the business. The case here being: Better and more cost-effective to remove the head of a business unit than three or five cogs in the wheels. On the flip side, by removing the cogs i.e. shaving away a huge number of "low-cost" people, we also run the risk of overburdening remaining managers and employees with more work, which can lead to dampened motivation and workplace fatigue. Aside from headcount measures, firms tend to also cut back on business travel, entertainment and other petty expenses as part of cost saving initiatives. While prudence is a commendable attribute, if we put too much focus on the small items, this will ultimately hinder business development initiatives in the bigger scheme of things and sometimes limit creativity and innovation. So to sum it all up, no easy way out. And all of the above fundamentally relates to cost savings - a convenient way to justify improving profitability to shareholders. However, most companies tend to neglect that " the short term cost savings provided by a layoff are often overshadowed by bad publicity, loss of knowledge, weakened engagement, higher voluntary turnover, and lower innovation — all of which hurt profits in the long run. " In times like these, it is even more important for the firm to be upfront when communicating to staff. In late 2010 with the onset of the Eurozone crisis, I remembered my entire team being rounded up in a meeting room to be given a brief "heads up" of the looming uncertainties. No promises were made. The job cuts came about 3 to 4 months later. It was a difficult time but that short briefing gave everyone sufficient time to get mentally and logistically prepared. No one benefits from such a situation - the folks who are departing obviously lose their jobs and the ones who stay on shoulder more work and responsibility. But as much as possible, you want to avoid having huge clouds of uncertainty hanging over everyone's head. It is of course also hard to be encouraging but still absolutely necessary for the firm and managers to communicate the facts to the team in terms of what to expect, rather than soldier on silently. Employees will be employees and 99% of them will always feel victimised in a situation like this. There is also another good cause for initiating cost-cutting from the top - to demonstrate solidarity . Collective hardship and pain are a good band aid for fostering some camaraderie during turbulent times. And perhaps more important than solidarity is trust. The relationship between a firm and employee extends beyond just a contractual agreement but a psychological one. Most employees who have been laid off don't feel that they should be penalised for the underperformance of the company, especially if the employee isn't in a leadership or senior management role. At the risk of sounding unfair to those with skin in the game , there is an inherent perceived disproportionate balance of risk and reward, in which the employee feels involuntarily placed in a weaker bargaining position, subject to the whims of their employer i.e. the firm ultimately reserves the right to terminate them during a period of economic uncertainty. But feelings of negativity and distrust can be contagious and can spread quickly within the rank and file. In the strictly commercial sense, profitability and shareholder value are both important metrics to measuring corporate performance. There are no jobs without the existence of a company, no company to speak of without the investment of capital. No capital without shareholders / stakeholders. But even as we strive to maximise profitability, it is equally important to ensure sustainability in generating profits, to go beyond the numbers and dive into corporate culture to examine the quality of earnings being generated. By solving for profitability in the near term, are we putting the longer term strategy of the firm at risk? In the words of the founders of 3G Capital : “Culture is not about supporting strategy, culture is the strategy.”