Looking for creativity and innovation? Hire a Pirate!

“It’s more fun to be a pirate than to join the navy.” – Steve Jobs

Steve jobs had a different way of looking at recruitment. He preferred the unconventional and creative nature of ‘pirates’ to the discipline of the Navy. So, why pirates?

Well, according to this post from Fast Co. Design, he believed that:

A pirate can function without a bureaucracy. Pirates support one another and support their leader in the accomplishment of a goal. A pirate can stay creative and on task in a difficult or hostile environment. A pirate can act independently and take intelligent risks, but always within the scope of the greater vision and the needs of the greater team.

“Being aggressive, egocentric, or antisocial makes it easier to ponder ideas in solitude or challenge convention,” says Dean Keith Simonton, a University of California psychology professor and an expert on creativity. “Meanwhile, resistance to change or a willingness to give up easily can derail new initiatives.”

So Steve’s message was: If you’re bright, but you prefer the size and structure and traditions of the navy, go join IBM. If you’re bright and think different and are willing to go for it as part of a special, unified, and unconventional team, become a pirate.

At Frontier, we are always looking for the passion, drive and creativity that fosters true innovation. If this sounds like you, send us your details at http://frontiergroup.info/careers/

The Global Economy in December

December saw the US Federal Reserve carrying out its third rate hike for 2017, as expected, while increasing expectations for US economic growth and forecasting three further rate hikes for 2018. With US inflation remaining low, it appears that the Fed will continue down the current path of gradual monetary policy normalization despite the higher growth expectations, which has been helped by the passing of tax reforms by the Congress.

Looking ahead into 2018, analysts pointed to US tax reforms as possibly causing the US dollar to strengthen in the first quarter helped by US companies repatriating capital held overseas. While the Trump administration appears to see US growth jumping to 4% due to tax reforms, the Fed’s latest minutes show that it sees a much more moderate impact.

As 2017 came to a close the volatility in emerging market stocks seems to have increased, with the 30-day historical volatility on the MSCI EM Index climbing to its highest in almost 12 months. This could have been because investors were caught in a conundrum, stuck between the possibility of global growth driving further EM gains and the risk of tighter monetary policy affecting EM assets, leading some to take profit from the gains of 2017. Nevertheless, the Institute for International Finance noted that 2017 recorded $235bn in portfolio capital inflows to EMs; the highest since 2014.

Pakistan presented an interesting case in December, being able to comfortably raise $2.5bn in dollar debt despite the domestic political uncertainty and balance of payment imbalances, which have prompted foreign investors to move away from Pakistani stocks. Neighboring India has seen the budget deficit for the first eight months of the fiscal year jumping to 112% of the full-year target, prompting increased borrowing and reducing the space for the Modi government to adopt populist policies ahead of the 2019 elections, amidst slower growth.

Brent oil prices stayed above the US$60 mark, with a new two-year high of US$67.02 being reached on the 26th. Prices continued to be held up by hopes of the supply glut ending in 2018, as the OPEC-led group extended the production limitation at their November meeting. Helping prices has been the oil pipeline closures in UK and Libya, a strike by oil workers in Nigeria and promises by Saudi and Russia that any exit from production cuts would be gradual. But gains have been capped by concerns about rising US oil output amidst higher prices.

Up-down-Up 3.0; Our team from the past, talking about the future

We just had our third instalment of Up-Down-Up! 🎊🎉

Now, we know what you’re thinking, “What’s an Up-Down-whatever?”. We’re glad you asked!

Up-Down-Up is Frontier’s very own Forum. It’s a platform for us to share our views and engage with our clients.

But what makes this year so special? Well, this year was the first time that our panel (Yeah, we got one of those 😎) did not consist of just members of our team … sort of. This time our panel also included several of our Alumni – what we like to call, the Frontier Mafia.

Back to the future with our Alumni panel

Chanakya Dissanayake

Our first panellist was also Frontier’s first employee – Chanakya Dissanayake. Chanakya played an instrumental role in Frontier’s early stages, back when frontier was operated out of what is now Amal’s son’s playroom. He worked with Amal on varied “consulting” mandates, completely different to what Frontier does now; in particular, helping a plantation company devise a major long-term business plan.

Following that, Chanakya joined Amba Research (what is now Moody’s Analytics Knowledge Services) and has been with them since the Colombo delivery centre’s inception in 2003. Now, he is the Country Head and a Director at Moody’s. In plain terms, that means he is currently responsible for all aspects of research delivery and client relationship management for engagements serviced out of Colombo and he also leads the investment research practice globally.

Dinike Jayamaha

Dinike returned to Sri Lanka in 2009, soon after the War ended (a year when Frontier nearly doubled in revenues) and led the Economic research of Frontier. Since then, Dinike has co-founded various non-profit micro-ventures in Ghana, Kenya, England, and Sri Lanka.

But he’s always had a passion for 3 things; family, firsts and fitness (kind of similar to Frontier’s own “life-first” philosophy). So, he set out to find a healthy, family friendly and ethically manufactured product that he could develop into an industry game-changer and a global first – and he did! He is currently the Founder/CEO of Ethical Extracts, the world’s first producer of high potency Ceylon Tea liquid extracts utilising a close-to-source supply chain model.

Shiran Fernando

Finally, one of Frontier’s most recent Alumni, Shiran Fernando spent the last 6 years at Frontier working in the Economics Team, again a period of fundamental growth and change at Frontier when revenues nearly tripled. Over the last few years, he led the Economic Research Team, holding the role of Lead Economist and Senior Product Head. Fancy designations aside, this meant that he was responsible for the growth of the team and any product development.

Shiran is now the Chief Economist at the Ceylon Chamber of Commerce and head of the Economic Intelligence Unit, providing policy level support and strategic advice to the Government to shape the national economic agenda.

But why Up-Down-Up?

The reason we decided to call our Forum Up-Down-Up was because of the economic philosophy that we follow at Frontier – something called Up-and-Down economics.

Up-and-Down economics has been described as the economics found on the nightly news or the business pages of newspapers; the economics that is pre-occupied with what latest economic numbers are up and down.

Essentially, we look at a whole host of economic variables and argue debate on where we think they’re going. We use that to try and predict where interest rates and the exchange rate will go in the future.

So, where are they going? Well, we’d love to tell you, but that’s just for our clients to know 😉.

But one thing we can tell you is that this instalment of Up-Down-Up was our best yet and we’ll keep it going for the foreseeable future!

The Global Economy in November

Global markets in November were affected by a number of noteworthy developments. The latest US Federal Reserve meeting minutes reconfirmed the high possibility of a December rate hike, while Deutsche Bank, Goldman Sachs and JPMorgan Chase have altered their forecasts to the possibility of four Fed rate hikes in 2018. In Europe, some political uncertainty has crept in again due to the failure of Germany’s Angela Merkel to form a governing coalition, opening up the possibility of fresh elections in Europe’s largest economy. In Britain, the Bank of England’s first rate hike in a decade has been followed by renewed optimism about Brexit negotiations after last week’s talks with the EU turned out to be fruitful.

Political risk continued to influence Emerging Markets during the month. Dozens of royals and high officials in Saudi Arabia were detained, which was seen as a centralization of power by Crown Prince Mohammed bin Salman, and raised concerns about the Kingdom’s internal stability. It also coincided with increased tensions between Saudi and Iran in the region. In addition, Venezuela finally defaulted on some of its debt repayments bringing into focus the need for investors to be mindful of the risk they take on. During the end November/ early December period, EM equities have sustained some loses, mainly driven by the technology and energy sectors.

In Asia, analysts have pointed to South Korea’s rate hike as the start of what could be a gradual tightening pattern by Asian central banks taking advantage of the healthy growth rates. Meanwhile, the Indian economy received a boost in the month when Moody’s upgraded India’s sovereign credit rating for the first time since 2004.

Brent oil prices stayed above the US$60 mark, with a two-year high of US$64.27 being reached on November 6th. Driving prices up were geopolitical tensions in the Middle East and optimism on an extension to the OPEC-led production limitation agreement. However, prices have moderated since early November, standing at US$61.22 on December 6th. The moderation has been due to the lack of any major market-moving geopolitical events in the Middle East and on concerns about increasing US oil output amidst higher prices.

The Dark Side of Resilience

Resilience is a highly sought-after personality trait in the modern workplace. But could too much resilience be a bad thing?

 

Large-scale scientific studies suggest that even adaptive competencies become maladaptive if taken to the extreme.

Indeed, scientific reviews show that most people waste an enormous amount of time persisting with unrealistic goals, a phenomenon called the “false hope syndrome.”

For example, extreme resilience could drive people to become overly persistent with unattainable goals. Although we tend to celebrate individuals who aim high or dream big, it is usually more effective to adjust one’s goals to more achievable levels, which means giving up on others.

Along the same line, too much resilience could make people overly tolerant of adversity. At work, this can translate into putting up with boring or demoralizing jobs — and particularly bad bosses — for longer than needed.

 

For more insights into workplace best practices visit hbr.org.

Catch up on your favourite Friday Focus in our Archives page!

The Global Economy in October

October was marked by the implementation of a number of steps towards monetary policy normalization by major central banks and speculation on who President Trump would nominate as the Federal Reserve chairman. The month ended with markets pricing in the nomination of current Fed Governor Jerome Powell, which was confirmed on November 2nd ahead of Trump’s tour of Asia. Powell’s nomination is seen as marking the continuity of Yellen’s gradual rate hike policies and the possible relaxation of some US banking and financial regulations. In the meantime, progress on Trump’s promised tax reforms has increased the optimism for tax cuts happening in 2018 and boosting US growth. These factors helped push markets higher following the nomination.

The month saw the start of the Fed’s balance sheet shrinking process and further confirmation of a December rate hike as US economic data painted an optimistic picture even though inflation continued below the 2% target. The European Central Bank (ECB) cut its bond purchases by half to 30 billion euros on the 26th as expected, but its tone in doing so was very dovish. The ECB kept its options open by continuing the purchases till the end of September 2018 and stating that an extension beyond that is possible if needed.

Meanwhile, the Bank of England hiked interest rates by a quarter percentage point for the first time in a decade to 0.5%, despite weak economic growth in the UK. The Bank has a dovish outlook on future rate hikes and has retained its bond purchasing programs.

China’s Communist Party Congress also occurred in the month, where President Xi Jinping laid out his vision for China up to 2050. With the outgoing central bank governor warning about the level of debt, some are concerned, now that the congress is over, authorities will launch a concerted effort at deleveraging that could slow down the Chinese economy.

Emerging markets saw the return of political risk affecting performance during the month. This was mainly on the back of South Africa’s budget woes, Turkey’s diplomatic row with USA and Germany and Brazil’s tenuous politics. However, according to initial estimates, the Institute of International Finance (IIF) has recorded US$13.8bn in overall portfolio inflows to emerging markets in October. The moderation in inflows from previous months could also be due to rising US yields and a strengthening US dollar.

Brent crude oil prices continued to increase in the month passing the US$60 mark at the end of the month for the first time since July 2015. This was driven by continued optimism over the major oil producers seeking an extension to their production limitation beyond March 2018. Also helping the movement were geopolitical tensions, surprise drops in crude stockpiles and Chinese demand.

How to Decide Which Tasks to Delegate

Wondering how to decide which tasks to delegate to your team? Conduct an audit using the six T’s!

 

  • Tiny:Tasks that are so small they seem inconsequential to tackle and take you out of the flow of more strategic work.
  • Tedious:Tasks that are relatively simple probably are not the best use of your time.
  • Time-Consuming:Tasks that are time-consuming and do not require you to do the initial 80% of research.
  • Teachable: Tasks that can be translated into a system and passed along, with a final check
  • Terrible At:Tasks that do not fall into your strengths.
  • Time Sensitive:Tasks that are time-sensitive but compete with other priorities.

Over the course of the next two weeks, make a note of tasks that fall under the 6 T’s above. Then watch as your mind magically start creating solutions for next steps from that new vantage point of space and self-awareness.

 

For more cutting edge insights visit hbr.org.

Catch up on your favourite Friday Focus in our Archives page!

Banking Sector Performance – Interview transcripts

Topic: Performance of the Sri Lankan banking sector

Speaker: Nimesha Jayakody – Senior Product Lead

Video length – 11:47 mins

00:18: How have the interest being fluctuating over the past couple of months?

  • From around 2013 interest rates in Sri Lanka were falling almost until the end of 2015.
  • In response to the growing worry of excessive credit growth, the Central Bank started taking some policy measures from last year.
  • Stemming from that we are now operating in an environment with relatively higher interest rates

01:00: How did loans perform last quarter? Any specific loan categories you want to talk about?

  • As a result of the measures taken by CBSL there are signs that private sector credit is slowing down. In line with that, the loan growth in local private banks during 2nd quarter of 2017 also slowed down compared to the previous 3 quarters.
  • Another reason for this slowdown is that Banks have become more selective with regard to their lending
  • With regard to specific loan categories, A recent Fitch Ratings report mentioned that construction is the single largest sector that the Sri Lankan banks are exposed to and by the end of 2016, the segment accounted for around 17.5% of their total lending
  • However by analysing the quarterly financial statements it’s not very easy to give a view as to whether this trend has continued in 2017 as the loan values to this segment could be included in broader loan categories.
  • Another category to look at is the leasing category. In the 2016 budget last November, the Central Bank tightened the maximum loan to value ratios so the lending institutions couldn’t lend as much for vehicle leasing compared to earlier periods.
  • However in 1st half of 2017, we are still seeing some growth in the loan volumes under this category but at a much slower rate.

04:26: How have the loan repayments been last quarter?

  • One key metric that we look at to understand how healthy a bank’s loans is the non-performing loans (NPL) ratio. NPL is a loan on which a borrower is not making any interest payments or repaying principal amount they had borrowed for a certain period of time. The NPL ratio is simply the value of these loans as a percentage of the total loans. Lower the ratio, better it is for a bank.
  • For some time in the past few years we saw the NPL ratios improving.
  • A key reason for this was the gradual reduction in pawning facilities starting from around 2014 which back then used to be a source of high NPLs. Now the effects of that is slowly going away.
  • However, during the most recent quarters pawning activity had picked up and many banks reported a higher NPL ratio
  • Another reason for higher NPLs in 2nd quarter of 2017 were the floods and droughts that affected a lot of people’s ability to repay what they had borrowed.

06:05: How was the profitability of the sector in the 2nd quarter of 2017?

  • Overall, the banking sector achieved a higher level of profits compared to the previous quarter
  • A core reason was the improvement in banks’ net interest margin, where the core income source for a bank is the interest income.
  • In addition, total operating cost had only increased marginally and the staff cost had reduced during the quarter, along with the portion of taxes they paid.

07:20: Any comments  about the future strategic plans of banks?

  • One thing banks are looking at is the technology developments and automation efforts to make it more convenient for customers and to possibly reduce operating costs in the long run.

08:06: How have recent regulations affected the banking sector?

  • One key regulation that the banks need to adhere to is the BASEL III requirements; an international regulatory framework for banks where they set minimum levels of capital that banks should hold given a set of criteria.
  • BASEL III is being implemented in Sri Lanka in 3 stages and banks had to meet the requirements under the first stage by 1st of July this year. Looking at the quarterly financial statements, all banks had met these minimum requirements.
  • The next hurdle date is set for 1st of January 2018. Some banks will definitely have to raise capital through rights issues and other ways to bring their capital to the expected levels.

09:10: Were any new banking products introduced to the market recently?

  • Banks are trying to increase the level savings deposits they have since they carry a lower cost of interest to them compared to fixed deposits. So there have been several new savings deposit schemes being introduced especially for women.

09:37: How will the banks perform in the medium term?

  • When trying to understand how the banking sector will perform, the movement of interest rates becomes quite important. Frontier Research expects broader market rates to go down further within the next months before they start picking up again during the 2nd half of 2018. Usually the bank interest rates start moving in a similar direction but with a delay.
  • There is still a window in the short term for the banks to hold on to relatively healthy net interest margins. If the banks manage their deposits and lending portfolios tactically they could still perform sufficiently well for the remainder of 2017.
  • There is some uneasiness in the sector about NPLs and it’s possible that it wouldn’t improve within the year. We shouldn’t completely rule out the possibility of a real estate sector bubble either which can affect the banking sector significantly.
  • Overall in my view the banks will perform moderately well like they had done so far this year, but they need to drive performance very carefully so as not to compromise their long term stability.
  • This I believe is very important because, if banks, which are one of the most connected sectors in the economy, weaken most other sectors/industry will start feeling it too.

The 1-Hour Weekend Activity That Will Totally Change Your Week

While the weekend is a time for relaxation, it might be wise to set aside one hour during the weekend to map out the upcoming week. Here’s the four-step approach to planning your upcoming week.
 
  • Review the previous week. Think of this step as performing an audit on yourself. 
  • Get all of your ideas out of your head. Empty your brain of ideas, review those ideas and pick the most valuable.
  • Input your activities onto your calendar.
  • Decide on your daily actions. Identify and commit to the actions that lead to your desired results.
 
Visit inc.com for more on planning and beyond!

Catch up on your favourite Friday Focus in our 
Archives page!

We Built Time Twister to Solve Your No Time Problem. Here’s How.

We are on a mission to solve your “No time” problem and here’s how Time Twister became one of the solutions! 

 

We call it Time Twister because of its core purpose of saving time. But the name is also reflective of how we “twist” work hours, well away from the norm, to bring you Time Twister as early as possible each day.

8 Time Twister team members ensure that you get the news you require, delivered to you 7 days a week, 365 days a year.

 

For a more details on the story of Time Twister, visit the Frontier Blog!