Education 2.0 In Indonesia: Inspiring Bamboo Innovators (Jakarta Post)

Dear Friends and All,

“What use is an esoteric academic theory like Einstein’s theory of relativity?” Answering this question with the Bamboo Innovator framework can surprisingly lead to the uncovering of resilient compounders: the Indonesian-listed bread company Indosari, the largest mass-market producer of bread in Indonesia under the “Sari Roti” brand, and Mexican-listed Grupo Bimbo, the largest bread manufacturer in the world. Interestingly, Indosari’s market value of US$750 million (now over US$900 million) is almost 20-times smaller as compared to Mexico’s Grupo Bimbo’s US$15 billion, even though both Indonesia and Mexico have gross domestic product (GDP) of US$1 trillion. What is so unique about the business models at Indosari and Grupo Bimbo? Why are they Bamboo Innovators? I like to share the article that was published in Jakarta Post, the oldest and largest-circulated English newspaper (one of the few dailies who survived the 1997/98 Asian Financial Crisis): “Education 2.0 in Indonesia: Inspiring Bamboo Innovators”.

Education 2.0 In Indonesia: Inspiring Bamboo Innovators, May 11, 2013 (Weblink: Jakarta Post)

Jakarta Post_Bamboo Innovators

Below is the unedited version:

Education 2.0 in Indonesia: Inspiring Bamboo Innovators

April 2013

“What use is an esoteric academic theory like Einstein’s Theory of Relativity?” scoffed the “street-smart” students and “practical” businesspeople. Answering this question using the Bamboo Innovator framework can help foster resilient value creators in varied disciplines and remake Education 2.0 in Indonesia as we walk through the seemingly unrelated stories below and be amazed by how the dots connect towards the end.

Without Einstein’s modern physics theory, it would be impossible to use your iPhone to find your location on a map. The transistors in the phone rely on effects predicted accurately to several decimal places by quantum mechanics. The Global Positioning Satellites (GPS) that the phone uses to locate us incorporate in their software the deformation of space-time predicted by relativity theory to achieve navigation accuracy within about 15 meters of our actual position. Without the proper application of relativity, GPS would fail in its navigational functions within about 2 minutes. Thus, this theory plays a critical role in the multi-billion growth industry centered around the GPS.

GPS, in turn, has enabled the development of the GIS (Geographic Information System) to revolutionize the way we capture and analyze all types of geographical data for multiple applications from urban planning, disaster response, epidemic planning, mining and oil exploration to location-based services. ESRI is the GIS software pioneer, founded by Jack Dangermond in 1969. ESRI has an installed base of more than one million users in more than 350,000 organizations with over a billion in annual revenue achieved by 3,000 employees. ESRI grew by focusing on its users and employees, eschewing incentives such as sales commissions. “People want to do the right thing; they want to be purposeful in their life,” Jack said. “Throwing financial thresholds and goals — my experience in running at least my kind of organization is that it robs people of the culture of doing great things.”

ESRI, in turn, is linked to Singapore entrepreneur Wong Fong Fui who runs the conglomerate Boustead, which has exclusive country license to ESRI GIS software in South East Asia and Australia. Mr Wong is known as a turnaround specialist, having helped the loss-making unfocused QAF with a market cap of $15 million then in 1988 to build the Gardenia bakery brand in Singapore into a $500 million food business when it was sold, and now Boustead, which he bought for $14 million in 1996 and has a current market value of $580 million.

Interestingly, this $500 million market value has been exceeded by Wendy Yap who helped focus her family business Nippon Indosari to become a Gardenia 2.0 and the largest mass-market producer of bread in Indonesia under the “Sari Roti” brand with a market value of $750 million. Around the same time FF Wong got into Boustead, Wendy started Indosari in 1995 with her father Piet Yap, one of the Salim Group executive who co-founded Bogasari Flour Mills. The typical businessman might shrug and point out that for Indosari to be bigger than Gardenia is an obvious observation, since Indonesia is a far larger market than Singapore. However, many companies and MNC giants such as SaraLee had tried to expand in Indonesia earlier but all retreated with heavy losses. So why was Wendy Yap able to scale up while others with abundant tangible resources failed?

Indosari has adopted an open innovation business model in collaborating with Japan’s Shikishima Baking who helped Indosari in its technological processes in introducing Japanese-style soft breads that won over the Indonesian palate. Importantly, Indosari has built trust with retailers and customers to overcome the logistics nightmare that doomed its better-capitalized rivals through its strong distribution network for its highly-perishable products of more than 2 million pieces of bread daily, resulting in a dominant 90% market share. It sells its products through modern distribution channels and an innovative system of around 3,000 mobile tricycle carts to penetrate over 17,000 small traditional shops in the rural parts of Indonesia.

Yet, Indosari’s market value at $750 million pales in comparison to Mexico’s Grupo Bimbo’s $15 billion even though both Indonesia and Mexico have a GDP of $1 trillion. Bimbo is also the world’s largest bread manufacturing with over $13 billion in sales. So why is this “small white teddy bear”, Bimbo’s corporate image, which “began with great limitations” in 1945 from Mexico, a country where half the population lived below the poverty line, able to become the largest in the world and compound 24-fold in market value since 1994?

Given that over 80% of bread is sold in mom-and-pop stores in Mexico scattered miles from one another over poor roads, cultivating trust and support amongst its community of customers, suppliers and employees is critical to overcome the geographical limitations in scaling up. Small store owners tend to ask for credit which was provided informally by Bimbo. Its partnership with community bank FinComún leveraged upon the bank’s pioneering expertise in providing micro-loans to extend credit yet reduce bad debt and improve working capital position to free up more cash to carry out expansion. In a country known for the exploitation of workers, Bimbo has built an unusually people-oriented culture with its well-known policy of avoiding layoffs even in times of crisis and sponsoring its employees’ education which helped foster loyalty and committment. As a result, Bimbo was able to resist the 1991 threat from the arrival on the Mexican market of giant PepsiCo. While Bimbo innovated in integrating production-delivery-finance, none of it would amount to much if Bimbo had not offered the country affordable, edible aspiration, spreading this dream to nearly every remote corner of Mexico.

There is a common thread running through these stories: the resilient Bamboo Innovator. The vitality of the bamboo revolves around its empty hollow center in the same way as the “emptiness” of the Bamboo Innovator with its “indestructible intangibles” that derive its strength from “know-how” and “trust and support in the community”. The “emptiness” is why bamboo bend but not break in the wildest storms that snapped the mighty resisting oak tree. The intangible know-how in relativity theory has led to the multi-billion GPS industry which enabled the development of the GIS pioneered by Jack Dangermond’s ESRI whose leadership nurtured a culture of empowerment and innovations. FF Wong is attracted by this intangible know-how of ESRI, having built the “intangible” Gardenia brand. At the same time when FF Wong is building Boustead, Wendy Yap has scaled up a bigger, more focused Gardenia 2.0 at Indosari by cultivating trust and support in the company’s community of customers, suppliers, partners and employees, in the same way this “emptiness” worked wonders at Grupo Bimbo.

In the landscape of Education 2.0 in Indonesia, students can search for facts on Google, but Google and Facebook cannot tell them how to connect the dots in alignment with their talent and personality to pursue what they can excel in. With the Bamboo Innovator in their hearts, they will experience the uncanny: the raw sensual data reaching their eyes before and after are the same, but with this pertinent framework of meaning, the chaotic features and anomalies in the marketplace are visible. Instead of producing “grades”, “checklist-based holistic CV” and “high graduation salary”, the education system inspires students to be the Jack Dangermond inventor, the FF Wong and Wendy Yap entrepreneur, the quantum mechanics engineer and physics expert, the geography-based business and trade specialist, the teacher and the value investor, and so on. Their fate all intertwined as Bamboo Innovators to forge their own larger-than-self path to create value for Indonesia and the world.

2,557th birthday of Buddha celebrated in S. Korea

2,557th birthday of Buddha celebrated in S. Korea

Xinhua)  15:15, May 17, 2013

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Ben Franklin’s Face-Lift: The New $100 Bill

Ben Franklin’s Face-Lift: The New $100 Bill

By Keenan Mayo on May 16, 2013

After a three-year delay, the new high-tech $100 bill enters circulation this fall. Here’s how it’s designed to beat the counterfeiters.

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Education strategy and the philosophy of bicycle riding

Education strategy and the philosophy of bicycle riding

Budiono Kusumohamidjojo, Jakarta | Opinion | Tue, May 14 2013, 11:04 AM

Paper Edition | Page: 7

Indonesia is a vast country that should not tolerate dilettantish national policy formulations, let alone in the field of education, which should always be perceived as the most important undertaking of human investment.
With its population of 240 million people and abundant natural resources, it is a land that is badly in need of a state of the art education strategy.
Indonesia’s education strategy should be capable to withstand geopolitical shifts, yet, flexible enough for policy adjustments that may be called for by changes in the course of national development.  Read more of this post

Hedge Funder’s Advice On How To Go Through A Company’s Annual Report

Hedge Funder’s Advice On How To Go Through A Company’s Annual Report

BlackHatWall Street Oasis | May 16, 2013, 1:15 PM | 9,420 | 5

Still jet-lagged by 8 hours from a day and a half in London, I haven’t slept for a good 48 hours and remembered I owe WSO my process for dissecting a 10-k in the usual form. Before I get right into it, keep in mind every business is different and that will dictate the way you should read their specific annual report. What might be important to look at for an oil & gas company might be completely ignored for a hardline retail company, so don’t take this as gospel when your PM tells you to get up to speed on a company and you remember the stupid shit old BlackHat told you was right and you end up missing something crucial to making an investment decision. So with that, here is a full breakdown of how I like to look through a 10-K for the first time, what’s important to focus on, and what can be glazed over (if anything) to save time and/or not confuse yourself. As always, I’ll field questions afterwards if and when I feel like it to clear anything up. Read more of this post

16 Wildly Successful People Who Majored In English: Steven Spielberg, Hank Paulson, Mitt Romney, Michael Eisner

16 Wildly Successful People Who Majored In English

Vivian GiangLynne Guey and Max Nisen | May 16, 2013, 5:13 PM | 57,027 | 9

Guess what, contrary to popular belief, you’re not entirely screwed out of having a successful career if you get an English degree.  English majors get a bad rap in today’s college debate, and it seems they always have.  It’s argued that their education doesn’t provide the necessary skills required in today’s economy. However, there are always exceptions to the rule, and many English majors go on to become highly successful people in business, government and technology. We’ve included 17 people who prove that success is determined by your drive, not background.

Singer Sting was an English major at Northern Counties College of Education.

He might be known for his musical career, but at one time, Sting was a school teacher until he decided to pursue his musical passions full-time. He has since received additional honorary music degrees from Northumbria University and Berklee College of Music.

Mitt Romney, CEO of Bain Capital, was an English major at Brigham Young University.

Mitt Romney acquired a multimillion-dollar fortune running private equity firm Bain Capital. His success in business was a popular selling point during his 2012 presidential campaign. But he didn’t get that background from an undergraduate degree. He actually graduated from Brigham Young University with a B.A. in English before going on to Harvard to get his MBA and J.D. Read more of this post

The Greatest Blunders Of Genius Scientists

The Greatest Blunders Of Genius Scientists

Clara MoskowitzLiveScience | May 16, 2013, 2:47 PM | 3,699 | 8

Even geniuses make mistakes, and sometimes those mistakes turn out to be genius in their own right, helping to illuminate some underlying mystery or impacting the way an entire field thinks. In celebration of happy accidents and enlightening errors, astrophysicist Mario Livio of the Space Telescope Science Institute in Baltimore, Md., tells the stories of five great scientific mistakes in his new book “Brilliant Blunders” (Simon & Schuster, May 14, 2013). These stories serve to show how even the smartest among us can err, and that in fact to achieve a big breakthrough, big risks are necessary, which sometimes also involve big failures. Below are Livio’s choices for the most brilliant scientific blunders. [Oops! 5 Retracted Science Studies]

Darwin’s notion of heredity

Charles Darwin achieved an amazing feat when he came up with his theory of natural selection in 1859. “Darwin was an incredible genius,” Livio told LiveScience. “His idea of evolution by natural selection is just mind-boggling — how he came up with something so all-encompassing as that. Plus Darwin really didn’t know any mathematics so his theory is entirely non mathematical.” This feat is even more incredible given the notion of heredity how traits are passed from parents to offspring) that Darwin and scientists of the time subscribed to would have made natural selection impossible. At the time, people thought the characteristics of the mother and the father simply get blended in the offspring just as a can of black paint and a can of white paint blend to create gray when combined. Darwin’s error was in not recognizing the conflict between this idea and his new theory. “If you introduce one black cat into a million white cats, the theory of blending heredity would just dilute the black color away completely. There’s no way you would ever end up with black cats,” Livio said. “Darwin didn’t understand this, he really didn’t catch this point.” It wasn’t until the concept of Mendelian inheritance was widely accepted and understood in the early 1900s that the puzzle pieces of natural selection fell into place. Gregor Mendel proposed correctly that when traits from two parents come together, rather than blending, one or the other is expressed. “As it turned out, Mendelian genetics worked precisely to solve this problem. In Mendelian genetics you mix more like you’re mixing two decks of cards, where each card retains its identity — not like paint,” Livio said. Read more of this post

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