Why IPO?

Per SEC rule, a company is obligated to go public once it exceeds 500-shareholder limit.
But other than for this reason, why do companies decide to go public and offer its shares?
What are the benefits of going public? of doing IPO?

1. ACCESS TO NEW CAPITAL - Primary benefit of IPO is that it is the cheapest way to raise large pools of capital. That is the main reason why firms go public. Companies get to the point in their life cycle where they need to raise large amounts of capital to grow and if you are a company that wants to raise upwards of 100 million dollars, the cheapest way to do that is go to the public markets. Why is public market the cheapest avenue to raise money? In the public market, a typical investor is well diversified. Thus, they only have to be compensated for bearing market risk, not for unique risk. Cost of capital, or return required by investor, is lowest when a firm is public as opposed to private because firm is selling to broad, diffuse group of potential owners.

2. ACCESS TO FUTURE CAPITAL - Beyond its initial public offering, the firm might be in a position in the future where it might need to do second or third offering of its stocks so that it can grow further. Statistics have shown that roughly 1/3 of US firms go back to equity markets within 5 years.

3. INSIDERS CASH OUT - There comes a point in the life-cycle of the company when Venture capitalists and other early investors, having invested for a long time or close to or beyond its investment horizon, are looking to cash out and IPO provides a mechanism through which they can cash out.

Some non-essential reasons why some firms go public:

4. GET ON THE "Radar Screen" OF POTENTIAL ACQUIRERS

5. IN ORDER TO USE STOCK AS CURRENCY FOR MAKING ACQUISITIONS

6. HIGHER PROFILE 

David Kelley, IDEO

David Kelley, IDEO

David Kelley talks about "creative confidence" in this famous TED video. 

His point, in essence, is that creativity is not the domain of only a chosen few. 

Most people think that they aren't the creative type and shy away from tasks they deem requiring creativity because they fear that they can't do something creative. But he argues that, through a series of small successes of creative experience, people can transform themselves into the people who have the "creative confidence."  

It might not be accurate to say and it might be misleading to say that people can transform into a creative type because saying so suggests that people are not creative in the first place but can become creative through Kelley's process. 

Kelley's point is that people are naturally creative but they lose the "creative confidence" to be creative, somewhere along their life, most probably during early childhood. So it would be more accurate to say that people need to regain the "creative confidence" that they have lost than to say that people can change to have the "creative confidence".

How does one lose the "creative confidence?" Kelley gives an example of 3rd grader Brian. 3rd grader Brian was making a horse out of the clay and one of the girls who was nearby commented, "that's terrible. that doesn't look anything like a horse." and that discouraged Brian to make a horse ever again.

I had a fresh perspective on this issue because of my recent Junior Achievement(JA) volunteer activity. I taught 2nd graders as a JA volunteer and I was struck by how these 2nd graders were willing to raise their hands in every single opportunity they could get. When I posed a question or asked for a volunteer, all 24 hands of 24 students in the class would go up, wanting to participate and wanting to give his or her answer. I noticed that these kids weren't afraid to give a wrong answer and they weren't afraid to fail. I would say that these kids still have a "creative confidence." I talked to other JA volunteers who taught 4th and 5th graders and their willingness to raise hand or participate in class were quite different, more subdued. I think it's safe for me to conclude that some of these kids have lost their "creative confidence" as they advanced to 4th and 5th grade.

I presume that more of these kids will lose the "creative confidence" as they grow older. They will get more bruises and get hurt over the course of their lives by not-very-thoughtful people who hurt them with their words, put them down, and says things like “that’s terrible" or "that's stupid idea.” This is a sad reality and we need people to grow up with "creative confidence" somehow intact. 

Accomplishing this is a tall order for society and if accomplished, our workforce would have more people with "creative confidence" and would be better off as a result. In the meantime, intermediary solution for companies is to recognize that employees in your workplace are naturally creative and set up a corporate culture to help them regain their creativity and unleash their creativity.

Guy Kawasaki, Enchantment

Art of enchantment. We all want to be enchanting. 

Guy Kawasaki

We want to be enchanting so that we can mesmerize people with our irresistible charms and enchant people with products and services we create. Enchantment is an art and we need this artful skill if we want to be successful in our family life, social life, and in careers. Speaker and author Guy Kawasaki showed this art of enchantment masterfully in his Stanford talk with many funny jokes and illustrative examples. Here are my actionable takeaways to be more enchanting in personal and business contexts. 

1. Achieve likability through your smile. Work on your smile. Improve your smile. Shake hands firmly and with vigor, at least 2~3 seconds.
2. Achieve likability - Dress for a tie. If you are under-dressed for an event or meeting, it might signal you don't really care or that you don't respect others in that event. If you overdress, you are essentially saying, "I am better than you." So dress for a tie. Don't dress to show-off. Don't be too carefree with your wardrobe. Put some thought into it and dress appropriately.
3. Enchant Up: Enchant your boss. This is a critical advice for those working in any sort of organization. When your boss gives you an order, drop everything else and just do it. You might think it is useless, stupid, or even sub-optimal to do what your boss tells you do. But your boss most likely have a good reason. Drop everything and just do it.
4. Enchant your boss part 2 - Prototype & Bad News. If your boss gives you one week to complete a task, bring him or her what you worked on, your prototype, the next day. Get feedback and work to improve your prototype. Also when you have bad news for your boss, deliver bad news early. At the same time, make suggestions to fix that problem or bad news. Your boss will surely be impressed and be enchanted by you.
5. Enchant down: enchanting your staff or those working for you. Provide MAP for those working for you. MAP. Mastery, Autonomy, and Purpose. If you can convince people that "when you work for me, you will acquire new skills, master those skills, and will be provided opportunities to improve yourself", people will follow you. Provide latitudes to be autonomous once you have given the order. And provide a higher purpose, that intrinsic motivation, to work hard and make them understand that their work matters and that they are instrumental in doing good for the world.  
6. Enchant your staff part 2 - Suck it up. Don't ask people to do something you wouldn't do yourself. If you tell your people to fly coach on a plane, you should be willing to fly coach yourself.
7. Trust others. When you trust people, people trust you. Onus is on you to trust first. You can even make trustworthiness as your business or product strategy.
   - Amazon: You can buy book from us and return in 5 days. Even though people can read a book in less than five days and return, Amazon trusts you to do the right thing and you trust them back.
   - Zappos - people trust Zappos because Zappos has trusted you first by paying for shipping both ways.
8. Tell a story. A story that is compelling, memorable, and easy to understand will be more powerful when you launch. Case in point: Pierre Omidyar and eBay. Silicon Valley legend is that Pierre Omidyar started eBay because his girlfriend wanted to sell PEZ dispensers online. Even though this story is not true, the story took on a life of its own and became a legendary story. Don't make up a lie but maybe bending story a little to make it more memorable and compelling might be necessary when you are selling your presentation or your start-up company.
9. Default to yes. When you meet people, always think, "how can I help that person?"
10. Invoke reciprocation.  

Let me share two fabulous stories about power of helping people and reciprocation. First story is about people of Mexico and Ethiopia. Italy invaded Ethiopia in 1935 and people of Mexico sent money to Ethiopia to support them. Almost 50 years later, people of Mexico were in need because of devastating series of earthquakes in Mexico and People of Ethiopia, even though they were in worse situation because of extreme famine and poverty, collected money and sent money to people of Mexico. Second story is about people of New York and Columbia, SC. Right after the civil war, people of Columbia used bucket brigades to fight fires because they didn't have right fire-fighting equipment.  People of New York, including Union soldiers, heard about this and donated money to buy city of Columbia, SC a state-of-the art hose carriage. A boat that was carrying it sank but they raised money to send it again. About 140 years later, after 9/11 struck a city of New York, people of Columbia, SC raised nearly half a million dollar to buy a fire truck for New York because people there pledged that they would come through for New York if it ever needed its help. 

As you can see, helping people and reciprocation is powerful. They are not just ways to enchant people. They make enchantments endure and they will help you make powerful and lasting relationships. Some practical tip Guy gave with regards to invoking reciprocation: when people thank you when you help them, you say, "I know you would do the same for me", acknowledging camaraderie between you two, and allow that person to pay you back in the future. Then you can do more favors for him and let him pay you back again, further enriching your relationships. 

Now, are you ready to enchant people around you?

Dan Beckerman, AEG

What's the day like for a CEO who has to manage a company that owns 11 sports teams, Staples Center, American Airlines Arena, LA Live district, The O2 in London, O2 World in Berlin, live-entertainment company promoting hundreds of concerts and events, and over 100 other different venues and organizations? Well, there is only one man who can answer this question and that man is Mr. Beckerman. Meet Dan Beckerman of AEG.

Dan was named a Chief Executive Officer of Anschutz Entertainment Group about 6~7 weeks ago and he came to UCLA Anderson to talk about his new job, his business, and his story.

Dan Beckerman, CEO of AEG

He was a student here at Anderson about 20 years ago and before that he was a tax accountant at Arthur Andersen. Coming into business school, he wanted to do something different after school and thought about what would be fun and what he really wanted to do. What did he think would be fun and something he really wanted to do? Sports Management. I, as 30-something year old male who loves sports, instantly understood how he could have arrived at such an answer. But how does one get into sports management? Lakers and Clippers recruit NBA players, but they don't certainly recruit MBA students and I do not know any of my classmates who are recruiting for sports teams. Is there certain process you can follow to get into sports teams or sports management?

Dan did not know how to get into sports management either. There was no internet back then, so he went to the bookstore and bought media guides that had names, phone numbers, and mailing addresses of every team, every league, and every sports. He quickly put together a resume so that it looked like he had some sort of sports experience and he wrote letters, more than 500 of them to different teams in different leagues. In those letters, Dan wrote that he really wants to get into sports, that he has a finance background, but he will do anything and whatever those teams can offer him. 

Then, he got rejection letters after rejection letters. He actually brought those rejection letters and showed one to us, one from Washington Bullets. He keeps these letters in his office and having them in his office makes him feel humbled and makes him realize how lucky he is. 

After all the rejection letters, he got one letter that was positive, and it was from Los Angeles Clippers. He interviewed with Clippers about 20 different times and they decided to take a chance on him and let him run Finance department of the Clippers. He took the job even though salary he made was less than what he made in his previous job and what he made in summer internship. His friends thought he was crazy to take the job with such low salary but he felt great about the decision and he reflected that it was the smartest thing he has done in his whole life. If anyone is thinking about making a career decision based on how much salary one can make, I would like to point that person to Dan's story. Ask yourself what you really want to do and be willing to do whatever it takes to do that, even if it takes writing more than 500 letters.

Dan was very happy with Clippers and he could have stayed with Clippers forever, but he met Tim Leiweke who completely hooked him in with his vision of what they can do together in AEG. Not just managing sports teams, but building arenas, and doing lots of different things. And Tim was right. They did million more things than Tim originally promised. They built Staples center, bought more sports teams, got into music business, built soccer stadiums, built arenas in Germany and London. With the owner Philip Anschutz's vision and backings, they helped AEG evolve to a company it is today, with real estate and venues side of the business that generates tons of cash flows and the contents programming side of the business with 11 sports teams and events and concerts that range from Coachella, Stagecoach, to promoting and managing tours of artists such as Rollingstones, Justin Bieber, Taylor Swift, and Bon Jovi. 

It was a great personal story as well as a great business story. So for those people who are inspired by Dan's career and want to build the next sports or entertainment empire, what can they do? From what I heard from Dan, it does not seem easy. Persistence seems to be a must-have quality because Sports and Entertainment world is very small community and very hard to break into. Also, you would need a game plan. Instead of going to a team and saying that "I just want to be in sports management", if you have a vision of what you want to do and how you can do it in sports management context, go after it in a strategic way and it will make the entry easier and allow you to have an easier conversation and better outcome with sports/entertainment organizations. 

Inflection Point: Thoughts On Our Career

Last week I read a book called “only the paranoid survive” by former Intel Chairman Andy Grove. In this book, Mr. Grove articulates the concept of inflection point and explains how to navigate through one so that a company can come out of it stronger and better on the other side. 

Mathematically speaking, inflection point is a point where slope of the curve changes sign, meaning it’s a point at which a curve stops curving one way and starts curving the other way. As shown to the left, inflection point, in a business context, is a point where profound and massive changes occur, where balance of forces shift from the old ways of doing business and the old ways of competing to the new ways of doing business and competing.

Actions a leader takes in and around that inflection point determines whether the business takes off and reaches new heights or whether the business declines and fades from our memory. Inflection point comes in many forms, be it a competition, a change in regulation, a change in technology, or even a change in a culture. 

An example of such inflection point for Intel was in early 1980s, when Japanese semiconductor companies started bringing in high-quality, low-price memories. Margins kept declining and declining, and Intel was at a crossroads of having to choose between continuing with memory business or focusing on Microprocessors. Through painful introspection and difficult decisions, Intel chose the latter and brilliance of that decision is evident still to this day when we think about how successful of a company Intel is today.

I think you would agree with me when I say that each person, every one of us, is like an individual business, that our career is literally our business, and that we are CEOs of our respective businesses. Just like the CEO of a big company, we will be faced with many inflection points throughout the course of our careers and whether our career path bounces upward or downward through such inflection points will depend on our actions in and around those critical inflection points. My hope in writing this post is that you become aware of what   career inflection points are, become sensitive enough to recognize one when you are confronted with one, and take proper actions to exploit inflection points to your advantage and ultimately have many successive upward bounces in your career inflection curve.

So how do you develop the ability to sense your career inflection point? First and foremost, be alert to changes in your environment and constantly ask questions about their implications. Be alert to changes in your organization. Let’s say there are rumors about reorganization. What does that mean for your career? Should you try to join a team that's newly being formed? Let’s say new employee with same skill set as yours just joined the company. Does your boss need two people with same skill sets? Can that new employee do the job better than you do? Let’s say your direct supervisor is not presenting any vision for your team. Should you jump the ship and join another team or leader with clear vision? These are valid questions to ask when such changes occur in your organizations or in your company.

Also be alert to changes going on in the world at large that are relevant to the business you work for. You must open up your mind to outside views. Read the newspapers. Attend industry conference. Network with people in other companies. You may hear about impending changes that may be relevant to your career. Listen to chatters from colleagues and friends. Let’s say that you read in the newspaper that there’s new super robot capable of writing software on its own or capable of doing your job. What would you do to prepare for the arrival of that robot? Let’s say there is a new wave of internet innovations and new technologies. How would those innovations and technologies change the way you and your team work?

Maybe you are in the right industry but you are in the company that’s in decline. Should you change the company to advance your career? Again, asking these questions about your career in the context of larger world is important to do. 

Lastly, Imagine and Experiment. Picture yourself in different roles, Read about these roles. Talk to people who are in them. Experiment your speaking skills and leadership skills in a variety of settings. Maybe you find out you have a real talent for managerial or PR positions and that could lead you to a different career trajectory. Maybe you can ask your boss to give you different assignment, which can lead you to a different career path. Through imagining and experimenting, you might find your true passion and a whole new career.

So in conclusion, my action points for you are three-fold: 
1) Be aware of career inflection points b/c they are sure to come in your career. 
2) Be alert to changes in your environment, in your industry, in the world at large. 
3) Imagine and Experiment in new roles and skills. 
I urge you to get in front of these career inflection points and change with them and I wish you much success on your career journey. 

Innovation Economy

I attended a talk by Eli Groner, Israel’s Minister for Economic Affairs. He was at UCLA campus to talk about Israel’s innovation economy and innovation in general. Did you know that Israel with its small population of 7 million people has more successful start-up companies than Japan, China, India, and UK? More than 63 Israel companies are listed on the NASDAQ, more than those of any other foreign country. Eli attributed this astounding success to an Israeli mindset, a mindset of innovation that permeates across all sorts of industries and all sorts of functions, across all levels of hierarchy within organization. 

One example he gave to illustrate this innovation mindset was the mindset of an Israeli young man who went on to a found Netafim, the world leader in drip irrigation. I did not exactly understand the mechanism of this story but the point was that he was told to do something specific (plug the holes where there’s leakage) by his boss, and rather than blindly following the order, did something exactly the opposite(poke more holes in the land).  It was open-mindedness on his part, having thoughtful approach, and having information his boss didn’t have and feeling comfortable enough to defy his boss’s order that brought the innovation.  

Eli went on to say that real secret to innovation is cultivating a culture in which people are not scared to fail, not scared to think independently and think on your own. This line of thinking is something you might have heard before, but it’s good to be reminded and good to hear in the context of another country. As I write this, I worry people feeling jaded and cynical about having heard this sort of argument before because I also felt a little of that…but I think there is SOMETHING to be said about the record, Israel’s track record of having that many successful innovative start-ups. It’s hard to brush aside Israeli minister’s comment just because it’s a message we heard before of “don’t be afraid to fail.” 

Defying authority might be a very hard thing to do in non-western culture . But maybe there’s another way around it in non-western culture. Instead of openly defying authority in the company…you could go to your boss privately and convince him or her why you think you should go with his way, and not the boss’s. Boss and the company has role in this too….making people feel not AFRAID to fail, not afraid of repercussions, and not AFRAID to challenge them….making environment and making precedents so that people can come to you feeling comfortable to suggest something completely opposite to boss’s opinion. 

Anyhow back to this guy Eli. He reiterated that innovation is a mindset, an approach, how we think about things. Too often we do things because we are told or because it’s a way that has been done always. Biblical phrase he introduced in context was “we have eyes but we don’t see.” I think what he was trying to say through that biblical passage is…with our eyes, try to see beyond what we are told, beyond what’s in front of us, and be open to change and other possibilities. 

Somewhat abstract level of talk about innovation but nonetheless it was interesting to listen to. 

Gregory Craig, Inupiat Energy

Greg Craig, CEO of Inupiat Energy company, was a very interesting guy. Full of energy. Very much an extrovert. Straightforward. Did not mince words at all when it came to opinions about certain political figures. Went to high school with Sarah Palin. He also served on President’s export council during the Clinton administration and he said the following about Bill Clinton, which I found fascinating: “One of the smartest guys I have ever met. Best listener. Totally engaged in every conversation.” What does this tell me about being a good leader? Ability to listen…really listen…and being truly engaged in conversations and making others feel listened to and engaged is…an ability that is a must-have for all leaders. Greg could not find a job he wanted out of UCLA Anderson because of ’88 crash but he started his own company and has done really well for himself since then. He became an entrepreneur since  and he gave us leadership points during his talk, especially from entrepreneurs perspective, and here they are.

A) Think BIG. Start BIG.

B) Put all your eggs in one basket, when you don’t have much. (Can’t do this when you have a lot. When you are a big company or have a lot to lose, diversify)

C) Oversimplify everything. (Every good entrepreneurs do this.)

D) Listen to everyone for data. But do your thing.

E) Take ACTION whenever you can. ACT Decisively.

F) Have an edge in business.

G) Do one thing really well at really low cost.

H) Every great leader: great listener.

I) Know who you are and be that and surround you with others who complement you.

J) Have fun. Try as hard as you can.

K) Treat everybody well.

L) Leader is a merchant of hope. (for all employees and for customers)

M) Arrogance kills everything. Arrogance is terrible. Just terrible.

N) If you succeed too much, someone will get pissed off. (referring to Enron’s hostile take-over attempt at his company.)

      

One common advice that I found from both Jim Morris and Greg Craig is that when you are a leader, you should surround yourself with people who have complementary skills to your skills. Greg said that his early company was successful because he found a business partner who complemented him. Greg’s partner was a Swedish man who was very conservative whereas he was not and this combination really kept them out of extremes and made them successful. Ability to find such people who complement you begins with self-awareness, knowing your strengths and weaknesses and finding ways or people to deal with weaknesses.

Jim Morris, Pacific Life

One of the perks of attending business school is chances to meet and listen to business leaders in person and the very first business leader I met in business school was Jim Morris, a 

current Chairman and CEO of Pacific Life, an US insurance company.

Jim Morris, Pacific Life

He was soft-spoken and calm throughout the presentation and there was a reassuring presence about him; his qualities seemed to reflect the industry he was working in and he seemed the right type of leader for insurance industry, which tends to be conservative. He first explained his company and landscape of insurance industry and how he got to his current position. It was interesting to listen to how he never thought of or sought higher positions in his company but several key promotions came his way as he became successful in each of his positions. Then he shared his business philosophies and leadership philosophies.

*Business philosophies

When he was sharing his business philosophies, I felt that he really valued having competitive advantage and sustaining that edge because I heard him mentioning competitive advantage and sustainability a lot.  Do you know what Warren Buffet’s favorite question is when Buffet considers investing in some company? It’s “what happens to your business if you have to increase your price 10%?” Jim explained that, when Buffet sees business owner stammering to answer the question, it’s a business that doesn't have much of a sustainable (competitive) advantage. How can companies achieve that competitive advantage? Competitive advantage can come from any of the following differentiating factors: 1. Price leadership; 2. Product Innovation; 3. Customer Intimacy(Service). He gave Apple as a company that has competitive advantage through Product Innovation and Nordstrom as a company that has competitive advantage through Customer Intimacy. He explained that his company can’t really achieve price leadership because a lot of insurance pricing comes from yields/interest/Wall Street and can’t look to Product Innovation because insurance products can’t be patented and has a very short lead time before other companies come out with similar products. So he focuses on Customer Intimacy or Service as source of his company’s competitive advantage. I thought it was an interesting framework to define how businesses seek to find competitive advantage in the market. Jim also talked about his approach in looking at the business opportunities and called it “flow” and how he has ideas and liking for certain business opportunities but waits for perfect opportunity and time to capitalize on that opportunity to the maximum. So it’s always good to have a range of ideas that are to your liking and look for that “flow” or opportunities to form perfectly and take advantage of such opportunities to the maximum.

*Leadership philosophies

A) Balancing work between Wheelhouse, Stretch, and Totally Uncomfortable.

Jim explained how his day-to-day tasks fall into one of these 3 categories. He said that doing totally uncomfortable  tasks are engaging and can be fun when you learn something new from it. As professionals, I think we all have our own wheelhouse skills and we should definitely keep those skills sharp. But I think doing something stretchy or challenging ourselves to do totally uncomfortable tasks at times are absolutely necessary because doing so will make us grow. Some of things I am experiencing and learning at business school now are stretch tasks and some are totally uncomfortable tasks but going through these and learning from them will make me grow, stronger and wiser.

B) Surround yourself with people with complementary skills to yours.

Jim said he is a big believer in surrounding himself with people that are very complementary to his skills. He is a big believer in knowing one’s strengths/weaknesses and surrounding oneself with people with complementary skills.

C) You can’t over-communicate as a leader

Sometimes we hope problems at work will somehow work themselves out and hope problems will go away. But hope is never a good strategy. Jim talked about Pacific Life’s relationship with one of the old clients and how that relationship almost ended. Jim said that any long term relationships that have been successful, at some point, needs re-investment. At some point, you have to re-invest in it like a new relationship. Jim joked at this point about how his wife of over 30 years said “that’s pretty good advice for marriage too” when Jim previewed his speech to his wife before coming.

Towards the end, during the Q&A session, one classmate asked Jim how he was able to stay at the same company over 30 years and here’s how he responded. He said that he had the respect for the people he worked for and felt values are the same. If values were different and if he had felt his leaders were not looking after him, he said he might have left.  Something every company interested in keeping top talent should think about.

Sheryl Sandberg, Facebook

Sheryl Sandberg is someone in the business world whom I have come to really like over the years. I read a great profile of hers from the New Yorker and I wanted to write down few thoughts that came to me as I read it. Here goes. Check out the article if you have time. It's pretty good read. 
http://www.newyorker.com/reporting/2011/07/11/110711fa_fact_auletta

Unlike most students
You would agree with me when I say Sheryl Sandberg must have been unlike most students. There must be something different in how she got things done and how she gets things done now.
In the article, Lawrence Summers tells a story of how Sandberg typically works. At the World Bank, in 1991, when Sandberg was working as a research assistant , Summers gave her a task of researching on  bailout of Russia. "What most students would have done," Summers says, "is gone off to the library, skimmed some books on Russian history, and said they were't sure it was possible. What Sandberg did was call Richard Pipes," who was a leading  historian of the Russian Revolution and a professor at Harvard. "She engaged him for one hour and took detailed notes." The next day, she reported back to Summers.
I was particularly struck by this section and a sentence following "What most students would have done" because I wondered what I would have done under similar situation. Would I have been like most students? Maybe. Maybe not. What's so impressive with what Sandberg had done is that she knew who to go to and went right to the expert and engaged him for hour and took detailed notes, saving herself a ton of time. 
I reflected on my seven years in tech industry where I was more like most students and less like Sandberg. At times, I tried to figure out the answer on my own, when the right approach was to go and talk to the manager who was in charge or knew history of that particular issue. The key is to know who to talk, find out who to talk to, how to develop relationships with such right person, and how to engage that person. Doing so will get the job done right and with speed. 

Ambition and Humility
As I was reading the article, I realized why I came to like Sandberg over the years. It's because she is the kind of person I would like to be: ambitious and yet humble. In the article, Ken says that Sandberg neither flaunts nor hides her ambition. Mark Zuckberg says "she really wants to get her hands dirty and work, and doesn't need to be the front person all the time." Howard Shultz of Starbucks says of her, "Most people you meet who are highly qualified and accomplished tend to want to tell you all the things they've done and how smart they are. Or they want to impress you. Sheryl is not like that at all." 
Smart. Ambitious. Humble. Sheryl Sandberg.

Connecting the dots or not
Didn't Steve Jobs say you can't connect the dots looking forward and you can only connect the dots looking backward? Well, Sandberg must have been a fan of Jobs because, in the article, asked what she can imagine doing next, she responded, "I always tell people if you try to connect the dots of your career, if you mess it up you're going to wind up on a very limited path. If I decided what I was going to do in college -- when there was no Internet, no Google, no Facebook.....I don't want to make that mistake. The reason I don't have a plan is because if I have a plan I'm limited to today's options. 
I think everyone has a plan or thought about a plan to get ahead in his or her career. I, for one, have thought about a plan. Working hard. Getting noticed. Getting an MBA. Rising up the corporate ladder. Does this help me to achieve or limit me to one path and close other paths or options out there?

Indra Nooyi, PepsiCo

I am fascinated by people and what happens in the business world. As someone who is a student of business, who deals with people and works in the business world, I believe I can improve myself by blogging about people, business world, and people in business. Please follow along my journey if you share my interests. 

My first post is about Indra Nooyi. She visited UCLA Anderson, as part of Dean's Distinguished Speaker Series, to give a talk to MBA students.

Indra Nooyi @ UCLA Anderson, November, 2012

I had no idea who Indra Nooyi was before but I came away from this event very impressed and inspired, by her insights and her remarkable story. She is the Chairman and CEO of PepsiCo, the second largest food and beverage business in the world. What’s even more remarkable to me, personally, is that she was born and raised in India and yet she climbed all the way up the ladder of one of the biggest American companies, as a foreign-born citizen. I think that’s really remarkable. In this event, she took a wide range of questions, everything from impacts of social media to competition with Coca-cola, and she answered them with a level of thoughtfulness and understanding that befits her title. When asked about competition with Coca-cola, she jokingly said, “which company (are you talking about?)”, and drew huge claps and biggest laugh of the day, displaying a sense of humor and a certain confidence and pride about PepsiCo in a very likable way. 

Let me share her story and her insights on few topics, which I think you might find interesting or useful. 

Her mom and Prime Minister/President of India

She shared her story of how her mother would ask her and her sister on the dinner table what they would do on certain issues if they were Prime Minister or President of India. Then she and her sister would give speeches and her mother would vote on who had the best answer. (For those parents out there who have kids, this might be an exercise for you to consider adopting.) Her mom gave her the sense that she could be whatever she wanted to be. She told another story of how her mother gave her a piece of paper, told her to sign her name and write President. Why? Because her mother said to her that, “because one day you can be the President.” Well, she didn’t quite become the President of India, but I think it’s safe to say she has done OKAY for herself. 

Advices to MBAs and aspiring General Managers

During Q&A session, a student asked for advices for MBAs in general and what things to strive for and what mistakes to avoid as an aspiring general manager. To this question, she basically said we have to work hard and there’s no short-cut or substitute for hard work. I found this answer very direct and truthful. She said that when she was our age, she worked her tail off. When she was given a job, perfection was only thing she could accept and she worked all the time and 24 hours was not enough. Also in today’s worlds, everything is more volatile and it’s more difficult to operate in today’s worlds. She told us that we have to get even more of a wide perspective on issues, not just sound bites from social media but go in deep and learn issues, really engaging with issues. I could feel instantly what she was trying to say, how our generation tends to glance things over and have a superficial knowledge about things, not real understanding or knowledge about the issues. “There’s simply no substitute for deep engagement and hard work. You are going to have to put in the hours.”  "Don’t think that the world of the future will mean less hard work." Second piece of advice she gave was to invest in communication skills, very early in life. She said that, as a leader, we have to motivate people, medium-sized and large-sized groups, and write in a way that is simple and to the point and how you communicate will be critically important. If we don’t learn it early in life, we will never learn later in life. The third and last piece of advice was, “when you go to work, don’t go to a job aspiring for the next job. Don’t run for office. If you do the job you are doing very well, next job will come to you.” This last piece of advice aligned with what I heard from Jim Morris, CEO of Pacific Life, who said that he never really looked past his post and then…..promotions kept coming his way at certain points in his career, eventually leading him to his CEO position.

First woman to receive
the Wooden Award

Legendary UCLA Basketball Coach John Wooden

She were to receive a Wooden award later that evening and she shared her perspective on Wooden and his legendary leadership style. The thing she learned by reading and learning about Wooden is the question of how to live a better life. How do you live a life where you believe in yourself and how do you live a life where you believe in others? Coach Wooden often talked about virtues of virtuous cycle versus vicious cycle. Positivity breeds positivity. Believe in people and bring out the best out of them and they become better. I think this is a good lesson for leaders. In contrast, some bad leaders rule by negativity and take out the sticks only. But Coach Wooden emphasized using carrot and sticks, and he emphasized the importance of a team and he emphasized the belief in others as well. I found this Coach Wooden quote I think you might want to read. It's definitely a quote to reflect on.: 

"Leadership is all about helping others to achieve their own greatness by helping the organization to succeed" 

- John Wooden. 

Short-term VS Long-term

She lamented how a notion of short-term has changed from once much longer period down to 3 years, 1 year, and now all the way down to one quarter of 1 year. Realities of stock market where market value of company is set by short-term marginal traders and projections of some analysts might  force CEOs to manage the company only for the short term and doing so would be a disaster for that company. That’s because when you manage for the short term, you are running and pressing the company too hard and at some point, that catches up with you and company crashes and someone has to come back again run it very hard again . She likened it to running a NASCAR race. When you feel like it’s a race, you could make some short-sighted move and crash or run it so hard that the car only run about 20 laps and have to stop and refuel. Or you could run at a steady pace and get more laps out of the car.  She said, “We are not in a race. We are in a long-term, sustainable enterprise building business.” She mentioned that companies cannot run on a quarter…companies have to think about duration AND level, not just level…and CEOs and board of directors have to get more courageous in managing for the long-term as opposed to managing for the short-term brought on by pressures from the outside.

Attracting the best people

Her response on this was something I have never heard before and I think it is interesting. Dean Olian came in and mentioned that Indra ties 50% of her bonus to talent sustainability. I am not sure how that gets measured but nonetheless, I could see that she takes talent recruiting and sustainability very seriously. Her approach in attracting the best people is that she tells people to “bring your whole self to work.” People are husbands, wives, daughters, mothers, artists, and citizens. PepsiCo employees don’t have to park all that they are at the door when they come to work. She wants her employees to come to PepsiCo saying I am all of these things at home and a citizen in a community and a country. This way, employees bring all of their sensibilities to PepsiCo. Then she can tap into all of their capabilities and sensibilities when they bring their whole-selves to work and she can create a better company this way and she makes sure to create an environment in a company that makes employees feel wonderful coming to work at PepsiCo. 

What a woman. What a success story. Incredible insights about how to work, how to be a leader, how to run a company. What do you think?