Risk Management

il Personale

Dick Lam

Agenda

1. Financial body check-up

2. Re-identification of core competence

3. Risk management: A/R

4. Risk management: Production & Inventory

5. Risk management: Cash

6. Risk management: People

7. In-depth meaning on Risk Management

People

• This is you and me that usually exposethe company to risky situation

• Are you using the following assumption:– Manager’s job is to protect the company

from the abuses of the workers?!

• Why & How?

• Am I the only one that knows thecompany and its business?

• Do I welcome opposite comment?

opinion?

• Do I reward people for preventing mefrom doing bad deal which I originallythought it was good?

• How do I describe “Luck”?

• Do I continuously ask for negative

• There is no repeated fluke

• Goodness & badness co-exist (yin &yang)

opposition)

• The underlying principles of runningthe existing business

• The line between acceptable &unacceptable behavior

• The value of devil advocate (loyal

• Belief Systems– Systems to articulate the values and

direction that senior managers want theiremployees to embrace

– Draw employees’ attention to key tenets ofto business:

• how the organization creates value

• The level of performance the organizationstrives for

• And how individuals are expected to manageboth internal & external relationships

• Boundary Systems– Management principle: power of negative

thinking, minimum standards

– Tell people what not to do only and letthem figure out what to do

– Of particular value when employees underpressures to achieve superior results beingcollided with stricter codes of behavior

Who knows your business?

• Yourself

• Your employees

• Your suppliers

• Your bankers

• Your competitors

• But not your investment consultants

• Your customers

Trust

• Is myself trustworthy?– To the bank and to the employees?

• Is my business trustworthy?

• Do I trust my employees?

• Do my employees trust me?

• How do I earn the trust?

• ………….

• Is my business philosophy trustworthy?

Some sidetrack

Trust:

• I cannot ask for it

• I can accept being trusted or give trust

happen

• When I trust, I take the risk

• It liberates and mobilizes humanagency, release creative, uninhibited,innovative, entrepreneurial activismtoward other people

• When I trust, I expect something

To be trustworthy

• I need to be financially healthy– proved by the Balance Sheet & PNL

• I need to meet the expectation of the

employees

• I need to be consistent with what I saidand intended to do

creditors, suppliers, customers &

Risk vs. Uncertainty

• Risk: I do not know the future

• Do I create uncertainty?

• Why?

Transparency - GIVE

• Goals

• Identity

• Values

• Emotion

5 R – Cost saving strategy

• Remove– Why does a particular expense need to

incur? Is there a way to totally remove thisexpense?

• Replace– If not possible to remove this expense, can

we replace the function with a cheaperone?

• Reduce– If not possible to remove it, is there a way

to reduce the spending?

– We should think about request for pricereduction from supplier or sourcealternative supplier.

• Redesign– If not possible to reduce, can we re-design the

process to utilize the scarce resources?

– Kaizen should be a continuous process.

process by freshman.

– The old process creator should only act as ainformation provider but not member of newKaizen group.

– There should be a regular review of existing

• Redistribute– If not possible to redesign the process, can

we have the function to share its value todifferent functional area as well as the

– Maximization subject to constraint ismaxim not only in economics but also incost saving perspective.

Cost?

How to pay your staff

• Buy their time or their talent

• Treat them as staff or “working partner”

• Pay by fixed or portion in variable

YOUR STAFF ARE THE ONES DOINGTHE BUSINESS & GENERATING THEINCOMES