Archive for November, 2011

The 80/20 CFO: Ysmael Baysa focuses on the few things that matter

Posted in profiles on November 23, 2011 by gohelpyourself

Ysmael Baysa gets his best ideas after emerging from the shower room.

By Anthony O. Alcantara

If you have a hundred ideas for great products to sell, expect Ysmael Baysa to tell you to throw out 80 of them so you can concentrate on the 20 that look more like cows — cash cows, that is.

Baysa, who is the 2011 ING-FINEX CFO of the Year, believes in the 80 / 20 principle. He believes that you get 80 percent of the results from only 20 percent of the causes. You get only 80 percent of the revenues from only 20 percent of your products. The ratios are not fixed, of course. But the basic idea is that there is an inherent imbalance in most things.

As the CFO of Jollibee Foods Corporation, Baysa crunches a lot of numbers. Sometimes these numbers get so huge and act so strangely that Jollibee’s management calls on him for his interpretations and vatic pronouncements.

The 80/20 principle can help manage the complexity, according to Baysa. It’s relevant to the concept of strategic thinking that he believes has been overused by many.

“We have a simple rule,” he said. “If you are not making hard choices, you are actually not making a strategic choice. It’s always very, very difficult to decide what you are going to do, and what you are not going to do.”

“In budgeting, we say we’re going to do 20 things. In strategy, we’re going to do only two things very well. In strategy, less is better, but we have to do them very well.”

Tough decisions

The tough questions also involve decisions such as whether or not Jollibee should enter or exit a certain country, or a certain business.

Recently, the company sold Manong Pepe shortly after it had acquired Mang Inasal. It was a difficult decision, most especially since some fought tooth and nail to retain the brand. Facts and the application of strategic thinking eventually won.

It’s probably because of this faith in the 80/20 principle that Baysa does not schedule meetings with his staff.

“Actually, they are the ones who call me because they know what the priorities are, what the projects are,” he said in his deliberate and contemplative way. “They don’t involve me unless there are some decisions that need to be done.”

Big picture

Obviously, Baysa is not the controlling type. He’s much into broad picture thinking, more on the strategy side.

“It’s really the 80/20 rule, so you know that 20 percent of the items control 80 percent of the risk in terms of value. And that is what you think about,” he said.

“I’m more interested in knowing what will likely happen nine months from now. Will it hit us? How can we prepare the company? I look at economic and political news about China. What does that mean to us?”

Despite the unfeeling numbers and the serious analysis, he often bursts with good-natured laughter.

Why rather than how

When Baysa was young, he wanted to be an architect or a journalist. He was an associate editor of his high school paper after all. But being an orphan and with little means for sending himself to school, he decided to take up a course that could be useful and practical for business. So he took up accounting.

“I enjoyed it in a different way,” he said. “I was not enjoying all the additions. I was enjoying the theory. It’s not the math, but the theory. Why are numbers treated that way? Why five years for depreciation? Why 10 years? I think I asked the why rather than the how.”

Baysa’s interest in accounting theory, combined with his keen appreciation of history and economics, has led him to formulate his own definition of finance.

“It is economics used in the corporate world,” he said. “It’s a microcosm of economics.”

News junkie

Unsurprisingly, the first order of the day for him is to read the news.

“What does it mean to me in my work? What does it mean to Jollibee? Our future? I think one of my unique talents is to be so interested in the very broad picture: politics, economics at the level of accounting translated into financial analysis.”

His typical day starts at 5:30 am or 6 am. He drinks his coffee, says his prayers and meditates. He spends a lot of time in silence. Afterwards, he takes a shower. And just like Archimedes jumping out of his bath tub shouting “Eureka!”, Baysa comes out of the shower overflowing with ideas.

“Many of them are fresh ideas,” said Baysa. “I would say that most of the creative ideas and decisions have been done even before I reach the office.”

Two qualities

For Baysa, there are two qualities that a CFO must have: the mindset of a businessman, and the ability to see the big picture.

Many probably know this already, but few appreciate their importance, according to Baysa, who laments the abundance of financial analysis without context.

People’s understanding of inflation is one example. For most companies, it doesn’t mean only higher costs. It also means lower sales volume because people are less likely to open their wallets. It’s a double whammy that will only be apparent to those who see the bigger picture.

Of course, there are other tougher problems that CFOs would be better able to deal with, if they truly have a businessman mindset and big-picture thinking skills.

Advice to CFAs

Asked about his advice to CFA charter holders and candidates today, Baysa only has two words: intellectual honesty.

“You can have all the data and the numbers in the world but the financial analysts and even accountants have the capability to muddle the numbers, to manipulate the numbers. For example, in valuating a business, increasing the annual growth rate by 0.5 percent can make a huge difference,” he said.

“These things are most important in making big decisions. The real good decisions are tough decisions. But without intellectual honesty, bad projections are made to look good.”

A lot of it is based on judgment. For Baysa, there are two kinds of intellectually dishonest people: those who are dishonest and are aware of it, and those who are dishonest but are clueless about their dishonesty.

CFA Society of thePhilippines, which is one of the co-presenters of the CFO of the Year Award, is certainly not clueless. And yet, the danger is still there.

“It’s very important to be very conscious,” said Baysa. “You have to ask yourself, ‘Do I really believe this?’ Otherwise you will become used to it, and soon you will have become a big liar. In the end the truth will come out. It does take a lot of courage to be intellectually honest.”

That, in a nutshell, is Baysa’s distilled 80/20 wisdom.


(This story also appeared in the 2011 issue of Mind Swap, the newsletter of CFA Philippines. Posted here with permission.)


Bayleaf Hotel has laurel leaves

Posted in travel on November 17, 2011 by gohelpyourself

The entrance to Bayleaf Hotel.

By Anthony O. Alcantara

When you don’t cook, you don’t really care about ingredients. I learned something about a popular cooking ingredient when I was introduced to bay leaf, which, I learned recently, is just another name for laurel leaf. Don’t laugh. Maybe I came from another planet.

I learned this lesson recently after staying at the Bayleaf Hotel in Intramuros. My wife told me about the connection with the owners, too. Yes, the Hotel is owned by the Laurels. They also happen to own Lyceum University.

And there is the Lyceum Culinary Institute at one wing of the hotel. The Laurel family, Bayleaf Hotel, and cooking school. Now it makes sense to an ignoramus like me.

The hotel only has 10 floors, including the Skydeck.

In any case, I just love new hotels. They tend to offer huge discounts. Yes, I’m a newly minted bargain hunter. So when Ensogo offered a huge discount, I grabbed the opportunity by the balls and booked myself a room.

I really don’t know how Ensogo is making money. Groupon, a pioneer in the business, is having trouble. Some are questioning its business model, which I thought resembled that of a charitable institution.

But who am I to complain? When Ensogo sent me an email alert advertising a 50% discount for Bayleaf Hotel I quickly computed the risk-reward ratio — 50% discount on the P6,600 per night price tag for a room.

I concluded that the reward of untold happiness to be derived with my wife and 1-year-old baby there at the hotel greatly exceeded the risk of paying interest for this purchase.

Bayleaf Hotel is a boutique hotel. It has only 10 floors, including the skydeck, and 57 rooms. At the lobby, one wall has images of bay leaves etched into it. The architecture blends well with the buildings nearby and the walls of Intramuros. Just cross the street and you’ll immediately bump into the walls.

The view from our room.

This is our room. Baby not included.

Nice LED TV.

My wife Em enjoys the fast WiFi access.

Tickle time with Aria.

There is a spectacular view from our room: a stretch of the walls of Intramuros, the calming green grass of the golf course, the majestic bell tower of Manila City Hall, and a colorful swath of Manila. You can begin your walk along the walls of Intramuros from the hotel, if that is to your liking.

The hotel, which was opened only in September this year, has a lobby with an ascetic and modern feel. There is also a brand new Yamaha grand piano, on which my wife was able to play Für Elise, along with my baby Aria, who embellished her mom’s playing with random discordant notes.

Delicious churros from Cioccolata.

9 Spoons World Bistro at the 9th floor penthouse.

There is the 9 Spoons World Bistro at the 9th floor penthouse, where you can have an almost 360-degree view of Manila. The buffet breakfast has a limited menu, though. But it can satisfy most people’s hunger.

Consider this: Orange juice, cereals, fruits, pastries, arroz caldo, rice, corned beef with potatoes, sweet and sour fish fillet, pancit canton, and omelette an egg station.

I can’t say anything about the buffet lunch since we ate outside.

The skydeck is still under construction. Even part of the staircase at the ground floor is still unfinished. The staff said there will be a bigger and grander opening for the hotel soon.

There is also the Cioccolata café at the first floor of the hotel, near the culinary school. We liked the grilled ensaymada with queso de bola, worth P100. Even Aria, my baby, liked it.

The original churros with Spanish chocolate is good, too. Five churros loops for one order worth P75. The Dulce de Leche frappucino for P120 and the Cappucino for P100 are just as good as those of Starbucks in my opinion.

As for our room, all I can say is that I’m happy with it. There is a Sharp 32-inch LED TV, nice interior design with white and purple as the dominant colors, and a soft, nice bed that the porter said is the same type used in five-star hotels such as Sofitel. You can also surf the internet all you want with the WiFi access, which  is included in the room fee.

So if you’re looking for a nice hotel with a great view of Intramuros, the Bayleaf Hotel is it. Just don’t expect a swimming pool and a gym there.


Pacquiao punches the hyperbaric oxygen out of Marquez

Posted in martial arts on November 14, 2011 by gohelpyourself

Manny, Juan Manuel, please fight again.

By Anthony O. Alcantara

Juan Manuel Marquez was ready to raise his arms in victory and show off a nice bush of armpit hair. Instead he saw the one belonging to Manny Pacquiao victoriously gleaming in the lights as the winner was announced.

He was flabbergasted.

Pacquiao and Marquez did basically the same types of exercises during months of training. They trained as intensely as they could. They had access to similar supplements to nourish their bodies.

The only difference? Marquez has undergone hyperbaric oxygen therapy for an hour or so after every training day. This involves being locked up in a pressurized chamber and breathing pure oxygen, which he thought would help in muscle recovery.

I would have loved to offer him a cigarette while he’s inside the chamber, just to see how he’ll recover from that. Then again, he doesn’t smoke.

In any case, he lost to Pacquiao by a majority decision. The hyperbaric oxygen was not enough. He couldn’t knock out Pacquiao. And I’m glad I watched the fight live… live from Makati Palace Hotel’s conference room.

I got a deal from Ensogo and I thought it was the perfect opportunity for me to finally watch a live Pacquiao bout. The voucher cost me P900, inclusive of a buffet brunch. The food was not great, though. They probably hired the street vendors nearby to cook for them. Yet for a hungry man, it was good enough.

I was nervous all throughout the fight. I didn’t want to be the jinx who would cause Manny’s defeat. I just wanted to know how it was to watch a Pacquiao fight live on a big screen.

I was alone. Every time Pacquiao landed punches on Marquez, there was a collective “ooh”. But every time Marquez pummelled Pacquiao, you’d hear the same “ooh,” though with a slightly lower pitch. I guess it was like that during Pacman’s earlier fights.

This is what I ate. You can find food like this in street food stalls in Makati.

There were a lot of middle aged and older people watching. Around 250 were comfortably seated in round tables in the conference room. Three big projector screens were placed in strategic spots: one each on both ends of the L-shaped room, and one on the corner of the L. A few Americans were with their escorts who giggled too much, as if being tickled. There were a few kids with their parents, too. There were groups of friends in their 20s. I saw laptops and iPads. I guess people just can’t help posting messages on Facebook or Google + and tweeting about the fight.

Most of the time, I found myself, well, talking to myself. “Go Manny!” “Knock him out!” All the others were talking to their companions. But I was one with them. I felt their excitement. I shouted when they shouted. I oohed when they oohed.

It’s amazing how mere spectators can instantly become experts when watching Pacquiao fight. After the 12 rounds, some of my companions at the table were saying that Pacman would probably lose.

And I thought so, too. It was a close fight. It appeared to me that Marquez had more solid and clean shots than Pacman. But I didn’t keep score. I was still hoping that Pacman would win.

For some reason, before the winner was announced, my companions were already leaving their seats. Did they have a sudden urge to empty their bladders? Was there a fire in the building? Did I suddenly zone out and miss the announcement of the winner?

When Pacman was finally announced as the winner by majority decision, I said, “Wow, galing! Ang swerte ni Pacquiao!” I high-fived myself and the table. No use running after my table mates.

I admit that I desperately wanted Pacquiao to knock out Marquez. It was not a satisfying victory for me. But still, I’m glad he won.

Am I going to watch a Pacquiao fight in a hotel again? Probably not. Not unless I know the food is going to be great.

It was an awesome experience nevertheless. I’m not going to worry about any hanky-panky in the results. But I’d love to see another re-match.

So here’s a collective high five to all of you Pacquiao fans out there. Don’t leave me hanging.