Manny Maceda Global Managing Partner, Bain & Co. Justo Ortiz Marjorie Lao H.E Steven Robinson Chairman, Unionbank of the Philippines CFO, Lego Australian Ambassador Vince Dizon Chito Zulueta President and CEO, Bases Conversion and President, Eli Lilly Int’l Development Authority FORUM 2019 Mayor Vico Sotto Mayor Isko Moreno Pasig City City of Manila Mayor Abby Binay Former SAJ Antonio Carpio Dr. Michael Purugganan Makati City Supreme Court of the Philippines Silver Professor of Biology, New York University Astrid Tuminez President, Utah Valley University MBC FORUM 1 - 2019 The CEO Agenda in an Era of Disruption MANNYWorldwide Managing Partner, Bain & CompanyMACEDA 17 January 2019 | Fairmont Makati, Makati City This requires running on parallel tracks, which is complex. Engine 1 is the business that’s most profitable, which the senior management did a good job growing. With Engine 2, you try to incubate something new and different. This takes more time, needs different skills, and might actually threaten Engine 1. To manage new models while simultaneously continue growing Engine 1, Google uses an allocation for their investments called 70- 20-10. They invest 70% for R&D and innovation to keep their core businesses strong. Twenty percent goes to adjacencies or new related areas. Finally, 10% goes into The premise constraint today is talent, not ● Create a blueprint for the operating “moonshots,” which are unrelated, The defining parameters of a capital. Millennials, already the model. The CEO must lock in the might-disrupt-the-business ideas. management company change every largest group in the workforce “unit of value creation” and ensure 40 to 50 years. We are currently in the wants a higher purpose than just that the blueprint designs the The concept is to spread investments middle of another transition—a major making money for shareholders. organization around this unit. not just towards growing the core point of disruption—from the era of They are less motivated by ● Execute and deliver. Translate but also towards something totally strategy into language that the shareholder primacy to the era of the financial rewards, more by learning different that might become the core. organization understands and scale insurgent. and new experiences. Executives need new skills and mindset to create advocacy with customers, CEO as Chief Transformation the board of directors, and other The shareholder primacy era is manage new workers, veering away from hierarchy, fostering stakeholders. Architect breaking down due to a number of flexibility. When a company goes through a factors: transformation, it is a challenge if 4. Technology: Changes driven by Adopting an Ecosystem Mindset artificial intelligence, Internet of all the executives’ skills have been 1. Short-termism: According to a As business insurgent grows, it needs Things, and quantum computing, wired to build the successful core Reuters analysis, 1,900 out of to avoid slowing down by becoming businesses. Many of the instincts to among others. 3,297 publicly traded non-financial a scale insurgent. To transform from transform will be viewed as wrong US companies repurchased shares The challenge being an insurgent to a scale insurgent, or as a different set of values. In it is important to create value by between 2010 and 2015, and How can CEOs lead his/her company’s order to enable the new strategy, the working with ecosystems of value. In within this group, buybacks and transformational journey in the era of mentality of the organization might manufacturing, for instance, a company dividends were 113% of capital scale insurgency? have to be changed. Sometimes the spending, compared to 38% in should disaggregate its operations operating model has to be changed, to specific pieces and determine who 1990. On the other hand, R&D The following are the new CEO roles and that can be a difficult process. The should best control each piece. Then spend has fallen below 50% of in this era of disruption: CEO has to pick people who can play identify the areas the company is net income from over 60% in the Set a meaningful for the the transformation role and give them ● ambition really good at before finding the best 1990s. organization. In today’s world, the enough power to drive change. partner/s who can focus on the rest 2. Increasing complexity: ambition has to manifest a “nobler of the pieces. Having an ecosystem Corporations have gotten mission,” a purpose for people to mindset requires partnership skills. more complex. The traditional work for the company. Summary by command and control structures ● Develop a strategy or full potential Ma. Roxanne V. Lu Driving Growth from Engine 1 to MBC Programs and Projects are too complex and just plan to achieve that ambition. Director can’t keep up with the pace of ● Develop the right people and get Engine 2 innovation in the market. them into the right jobs, doing the The challenge for companies is to Layout by Clinton A. Balbontin 3. Changing workforce: The binding right thing. build a business that disrupts itself. MBC FORUM 2 - 2019 Transforming Fear Into Opportunity JUSTOChairman, Unionbank ORTIZ 11 February 2019 | Makati Shangri-La, Makati City Degree of disruption “We’re fearful. If you don’t transform and firmly Company life spans are getting shorter due to disruption. move into the Fourth Industrial Age, you’re not For example, US listed-company lifespans are down from 55 gonna be around. It’s important to take what years to 35 years, according to Boston Consulting Group. This J.P. Morgan says, ‘Go as far as you can see, is predicted to decline to 12 years by 2027. and when you get there, you’ll see further.’ Not farther, further.” Major business challenges Justo Ortiz • “Peer-to-peer” or “shared economy” Moonshot – Companies need “crazy, unreachable, impossible, • Marginal cost of production or service is near-zero. ridiculous” goals. Without organizing for a “moonshot,” returns • In a sharing economy, technology helps drive down costs, will be the same or just marginally better. give people power to self-serve, and satisfy own wants/ needs. Dual Transformation – Unionbank is pursuing change on two tracks. In Transformation A, the business is digitizing. How UnionBank is transforming itself In Transformation B, UnionBank is remaking itself as a Agile management – UnionBank uses Agile management technology company that is also a bank. This is leading to new to deliver new products, services, and features more areas such as a logistics supply chain platform, a blockchain- quickly, increasing its responsiveness to customers. In Agile based platform for rural banks. management, the top-down approach is replaced by cross- functional teams empowered to make decisions. People – Digitization and automation eliminate but also create jobs. New jobs include digital content marketing Stories – To get the customer-service and people-centered managers, digital data analysts, iOS and Android developers. culture it wanted, UnionBank sought and disseminated stories Jobs are lost, but not people. of employees making decisions that may bend usual practice Summary by Geneva Frances C. Guyano but don’t break the law. MBC Programs and Projects Officer Layout by Clinton A. Balbontin MBC FORUM 3 - 2019 Roundtable on Innovating for the Future MARJORIEChief Financial Officer, Lego LAO 15 April 2019 | Discovery Primea, Makati City THE CHALLENGE Lego’s way of addressing megatrends and its innovative strategies to remain competitive MEGATRENDS AFFECTING THEIR INDUSTRY 1. Reshaping of the retail environment, mostly driven by e-commerce 2. Digitalization of play and consumer engagement 3. Global economic and demographic shifts SEVERAL STRATEGIES ADOPTED BY LEGO Internet safety for kids in everything themselves, failing to SCAN HERE FOR MORE PHOTOS 1. Innovation in retail and offer partnership with UNICEF understand their own limitations. unique brand experiences 4. Grow, invest, and learn about in stores by creating a great new markets outside North Learning from this, LEGO experience for kids and America and Europe (i.e., returned its focus on their core parents (i.e., personalizing introducing the LEGO brand business, which is producing the mini-figures, augmented in China) LEGO bricks. Non-core businesses reality, mosaic maker) 5. Innovate the way LEGO does were sold or closed down, 2. Innovate product portfolio business through adopting but they deliberately pursued by integrating digital play sustainable operations partnerships to bring LEGO in with physical play experience other areas, such as in movies. You may also visit: bit.ly/MBCRTDLaoPhotos (i.e., making robotics fun for Maintaining the “LEGO DNA” kids, introducing coding to In the early 2000s, the LEGO Today, as a guiding principle offshore wind farms kids, and play using LEGO Group experienced a financial when expanding into other • Sustainable materials by 2030 augmented reality app) slowdown primarily because of product lines, LEGO focuses on - Take the first step with bio- 3. Maintain the strictest safety two things. First, the company the consumer and innovates based elements and continue standards for children during lost sight of what consumers based on what they want, to invest to come up with play, both physical and digital. want. Second, they tried to do while having the discipline to innovate within the company’s more sustainable materials for TECHNOLOGY AND COPYCATS constraints/parameters. their products “Technology makes it easier to copy our products, • Encourage children to take for example through 3D printing. The difference, of LEGO’s Big Mission: care of the planet themselves course, is the quality of the product. But technology has “All LEGO bricks will be made allowed us to innovate faster. In terms of dealing with from sustainable materials by copycats, we take a hard stand against infringement of 2030.” Summary by our products. We are working closely with governments Ma. Roxanne V. Lu • Zero-impact operations - MBC Programs and Projects and customs authorities, and we are educating Director consumers on the benefits of original LEGO products.” Global energy consumption of LEGO is matched by renewable Photos and Layout by Clinton A.