Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 7126

SEC offers relief for pandemic-hit financing, lending firms

The Securities and Exchange Commission (SEC) has offered regulatory relief to financial and lending companies to help them cope with the effects of the coronavirus disease 2019 (COVID-19) pandemic.

In a Dec. 22 memorandum circular, SEC Chairman Emilio B. Aquino said one of the regulatory relief measures for companies is the relaxation of the required maintaining net worth of financial companies under Republic Act No. 8556 or the Financing Company Act (FCA).

Under the implementing rules and regulations (IRR) of FCA, financing companies are required to have a minimum paid-up capital of P10 million for those in Metro Manila and other first class cities; P5 million for those in other classes of cities; and P2.5 million for those in municipalities.

The law also requires a financing company to put up a minimum additional capital for each branch or extension office. An additional capital of P1 million should be allotted for those in Metro Manila and other first class cities; P500,000 for other classes of cities; and P250,000 for municipalities.

“The commission hereby provides the following regulatory reliefs to financing companies and lending companies to help the covered entities manage the effects of the COVID-19 pandemic,” Mr. Aquino said in the circular.

Another relief that companies can opt to avail is the lower required investment in financing and lending activities, the SEC said.

Based on the rules, more than 50% of a financing company’s fund must be allocated or invested in its financing activities, while under the IRR of Republic Act No. 9474 or the Lending Company Regulation Act (LCRA), lending companies must use at least 51% of their funds for direct lending purposes.

The other relief that companies may avail is the relaxed period in the commencement of financing and lending operations under the IRRs of LCRA and FCA.

Under the said laws, a financing and lending company must start its operations within 120 days from the release of its certificate of authority to operate.

Mr. Aquino cited Republic Act No. 11494 or the Bayanihan to Recover As One Act (Bayanihan 2) as the reason for the regulatory relief measures. The law gave the SEC the authority to assist the industry in managing risks and potential losses amid the pandemic.

Meanwhile, the SEC said companies that avail of the measures are required to send documents such as a letter showing the intention to avail of the relief, the specific relief chosen and the reason behind choosing it, and a resolution from the company’s board of directors that approves the use of a regulatory relief.

“The company’s application to avail of the regulatory reliefs shall be subject to the commission’s evaluation, which shall be on a case-to-case basis,” Mr. Aquino said.

Recently, the SEC allowed the staggered booking of credit losses to help licensed financing companies, lending companies, and accredited microfinance non-government organizations during the pandemic.

It allowed the staggered booking of credit losses on or after Dec. 31, for a maximum of five years using the straight-line amortization method as seen in the profit or loss statement. — Revin Mikhael D. Ochave

AC Energy sets earlier date for stock rights offering

Ayala-led AC Energy Philippines, Inc. has moved the rights offer period for its stocks to this month, saying it deemed the earlier date to be “prudent” since its existing regulatory approval requires a January 2021 completion.

In a regulatory filing on Friday, the listed energy company said it would open its stock rights offering (SRO) on Jan. 18 until 22, from the first work week of February previously.

The move comes as the company announced that it had obtained approval from the Securities and Exchange Commission (SEC) on Jan. 5 to change its name to AC Energy Corp.

AC Energy is offering 2.27 billion common shares at an offer price of P2.37 apiece. The offering would consist of two rounds to be followed by a domestic institutional offer.

The net proceeds of the offering will be used by the company “to partially fund the development of its various power projects, inorganic growth opportunities as and when they arise, and its other general corporate requirements.”

AC Energy said it had amended its offer period for the offering following the approval of its executive committee. The listing of the stocks is set on Jan. 29.

“The Ex-Rights Date of 8 January 2021, and Record Date of 13 January 2021 remain the same,” the firm said.

The firm said that initially it scheduled the offer period from Feb. 1 to Feb. 5 to “ensure widest dissemination and participation.”

“Given the imminent Ex-Rights Date and Record Date, ACEN deemed it prudent to finalize the dates based on the existing regulatory approval that requires a January 2021 completion,” it said.

The revised dates are subject to the approval of the SEC and the Philippine Stock Exchange (PSE), as well as other conditions. The company said the dates may be adjusted at its discretion and the joint lead underwriters.

The company reiterated that its rights offering is exempted from the registration requirement of the securities code. Because of this, the offer shares are not registered with the SEC.

“Any further offer or sale of such offer shares is subject to registration requirements under the SRC (Securities Regulation Code) unless such offer or sale qualifies as an exempt transaction,” AC Energy said.

In a separate disclosure, the company said the change in its corporate name is meant to align with the expanded scope of business resulting from the consolidation of the international operations of parent firm AC Energy, Inc. via a tax-free exchange through an assets-for-share swap.

The assets-for-share swap will be reviewed by the SEC, and is subject to fair market valuation.

Last year, AC Energy’s top official Eric T. Francia said that the company would undergo corporate restructuring in the coming years. The restructuring would begin with a stock rights offering in the first quarter this year.

He added that the firm aimed to raise $2 billion in equity to exceed its 2025 target to reach 5- gigawatts of installed energy capacity. Part of the plan is to generate around 50% of energy from renewables in four years’ time.

On Friday, shares in AC Energy at the stock exchange shed 2.37% to close at P7.82 apiece. — Angelica Y. Yang

GCash operator raises over $175M in fresh capital; valuation nears $1B

Globe Fintech Innovations, Inc. (Mynt), operator of mobile wallet GCash, has raised more than $175 million in fresh capital from investment firm Bow Wave Capital Management, Ayala-led Globe Telecom, Inc. said.

“Mynt raised over $175 million in fresh capital from Bow Wave and its existing shareholders in multiple tranches, with post-money valuation of the final tranches at close to $1 billion,” Globe said in an e-mailed statement.

Globe said the fresh funding for its fintech arm will “further spur the growth of financial inclusion and the digitization of payments and financial services in the Philippines.”

The investment by Bow Wave, a close-ended private equity fund with a mandate to invest globally in online and mobile payment ecosystem companies, “will translate to a minority equity interest in Mynt,” Globe said.

The telco said its fintech arm had recorded a total transaction value of over P1 trillion last year.

“So far, GCash has empowered over 33 million Filipinos with digital financial tools and services through its innovative mobile wallet,” it noted.

Mynt President and Chief Executive Officer Martha Sazon was quoted as saying: “This investment from Bow Wave is a validation of both what we have accomplished as well as the potential of GCash in unlocking digital services in the Philippines.”

“The pandemic has acted as a catalyst in highlighting the importance of digital finance in society today and with this investment from Bow Wave, we look forward to further living out our vision of finance for all, enabling democratized access to payment and financial services to every Filipino,” she added. — Arjay L. Balinbin

Jobs recovery plan highights safe workplaces, confidence, small-business loans

The labor department said its recovery blueprint for employment will enlist multiple government agencies to bring about safer workplaces, improved business and consumer confidence, and the extension of credit to small businesses.

The three-year “whole-of-government” plan is launching this year to address unemployment in the wake of the coronavirus pandemic, Labor Assistant Secretary Dominique R. Tutay said Friday.

The blueprint is known as the National Employment Recovery Strategy (NERS), which the government hopes will support legitimate employment and entrepreneurship in the “new normal,” she said at a televised briefing.

Ms. Tutay said the Department of Labor and Employment (DoE) is preparing the recovery plan with the Department of Trade and Industry (DTI) and the Technical Education and Skills Development Authority (TESDA). Various other agencies were also consulted in the course of drafting the plan.

The top piority is the “safe re-opening” of business establishments as well as the safety of workers and consumers, Ms. Tutay said. “Second on the list is the restoration of business confidence, consumer protection,” she said. The program will also offer “reboot packages” or extend low interest-rate business loans to micro, small, and medium enterprises to help them recover from the pandemic.

The program also aims to upskill the workforce, particularly in digital skills, she said.

Ms. Tutay said the government is hoping that the Build, Build, Build infrastructure program and the Balik Probinsya program help restore economic activity in the countryside.

Some 420,000 workers were permanently displaced by the coronavirus pandemic, she said, arising from the adoption of more flexible work arrangements or alternative work scheme, or have closed temporarily.

She said jobs in health care, construction and business process outsourcing are the most in demand. — Kyle Aristophere T. Atienza

CREATE needs to pass in Jan. for firms to realize tax benefits by April filing – DoF

FINANCE Secretary Carlos G. Dominguez III said the bill lowering corporate income taxes needs to get past the bicameral conference committee by the end of January to allow enough time for companies to file their returns in April with the new rates, some of which apply retroactively to the second half of 2020.

“We hope that the Congress can pass CREATE before the end of January 2021 as this measure is crucial for businesses to continue operating, retain their employees, and create more jobs,” Mr. Dominguez said in a statement on Friday.

Both chambers of Congress took a month-long break on Dec. 19 for the holidays, and will resume regular session on Jan. 18.

The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill forms part of the government’s economic recovery package, featuring a scheme to reduce the corporate income tax rate to 25% effective July 2020, from 30% currently, while streamlining tax incentives to make them more time-bound and performance-based.

“This also provides taxpayers ample time to comply with adjustments to their returns due to the lowering of income taxes effective July 2020 before the tax filing season ends in April 2021,” Mr. Dominguez added.

The measure is expected to cost the government P251 billion in foregone revenue over two years – P133.2 billion this year and P117.6 billion in 2022, if the Senate version prevails in bicam session.

Senate Bill 1357 also provides an outright reduction of corporate income tax for small businesses to 20% starting July 2020 from 30% currently, while all other companies will have their tax rates gradually trimmed by one percentage point each year from 2023 to 2027 until the rate hits 20%.

The House of Representatives approved its version, House Bill 4157, in September 2019, when the measure was still known as the Corporate Income Tax and Incentives Rationalization Act (CITIRA). It was since repositioned as an economic recovery measure during the pandemic.

“CREATE is really about trusting the private sector. Instead of passing funds through what tend to be less efficient government programs, this will leave the money in the private sector’s hands to revitalize their businesses,” Mr. Dominguez said.

Mr. Dominguez said the economic team also hopes lawmakers can pass within the year two more tax reform measures covering the property valuation system and the taxation of passive income and financial intermediaries. — Beatrice M. Laforga

Meralco to increase power rates in January

Residential customers in Metro Manila will be charged more for power in January, with the typical household expected to pay an additional P55, Manila Electric Co. (Meralco) said Friday, citing higher generation charges.

In a statement, Meralco said that the January electricity rate is up P0.2744 per kiloWatt-hour (kWh) compared to its December level.

“Despite the increase, this month’s overall rate is still more than P0.70 per kWh lower than January 2020’s rate of P9.4523 per kWh,” Meralco said.

The utility said the typical household is one consuming 200 kWh. Households consuming 300 kWh, 400 kWh, and 500 kWh will see bill increases of P82, P110 and P137, respectively.

The generation charge rose P0.2058 to P4.4574 per kWh in January. Meralco attributed the rise to power supply agreement (PSA) and independent power producer (IPP) rates which increased by P0.2723 per kWh and P0.2428 per kWh, respectively.

PSA-sourced power accounts for 56.4% of Meralco’s energy requirements while IPPs are responsible for 37.3 %.

Meralco said PSA and IPP rates rose because Luzon’s peak demand fell by 252 megawatts (MW) in December due to reduced consumption as a result of colder temeperatures and the holidays.

“Similarly, the demand for power in Meralco’s franchise area in December fell to its lowest level since lifting of the ECQ (enhanced community quarantine) in May. Lower demand led to fixed costs from power suppliers being spread over lower energy volume, resulting in higher effective generation rates to consumers,” Meralco said.

Meanwhile, rates at the wholesale electricity spot market (WESM) – which accounted for 6.3% of Meralco’s energy requirement – decreased by P0.6135 per kWh.

Transmission charges for residential customers decreased by P0.0236 per kWh due to Meralco’s mandatory refund of transmission over-recoveries as directed by the Energy Regulatory Commission. Taxes and other charges were also reduced by P0.0078 per kWh.

On Dec. 29, the regulator approved the collection of a feed-in tariff allowance (FIT-All) of P0.0983 per kWh which would take effect in the next billing cycle. This led to an increase of P0.0488 per kWh in Meralco’s FIT-All this month.

Meralco said that the collection of the universal charge-environmental charge of P0.0025 per kWh remained suspended, as directed by the ERC.

Meralco’s distribution, supply and metering charges remained unchanged for 66 months, after implementing the registered reduction in July 2015.

Meralco reiterated that it did not earn from pass-through charges, such as the generation and transmission charges.

“Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP (National Grid Corp. of the Philippines). Taxes and other public policy charges like the Universal Charges and the FIT-All are remitted to the government,” Meralco said.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds an interest in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang

Pork prices rise as hog raisers scale back production due to ASF

THE rise of pork retail prices in Metro Manila was caused by a scaling back of production by commercial hog raisers due to the spread of African Swine Fever (ASF), an industry official said.

In a radio interview Friday, Nicanor M. Briones, Vice President for Luzon of the Pork Producers Federation of the Philippines, Inc. (ProPork). said Luzon is experiencing a shortage after most backyard and commercial hog raisers voluntarily cut back on their operations out of fear their animals will contract ASF.

“You will go bankrupt if you are affected by ASF since there is no cure yet. Also there is no budget from the Department of Agriculture (DA) to assist hog raisers,” Mr. Briones said.

Mr. Briones said the hog population of Luzon is around 7.5 million head, with 4 to 5 million of this total lost to ASF or to culls ordered to quarantine the disease.
“Some 4 to 5 million head were lost from the 7.5 million hog population,” Mr. Briones said.

According to the DA’s Jan. 8 price monitoring report, the price of pork shoulder, known as kasim, ranges from P320 to P380, while pork belly, or liempo, fetched between P340 and P420 per kilogram. The report took in prices at various wet markets in Metro Manila.

The DA’s suggested retail price (SRP for pork shoulder is P260 per kilogram, and pork belly P290 per kilogram, well below actual market prices.

In the same radio interview, DA Spokesman Noel O. Reyes said P1 billion has been allocated to indemnify hog raisers that were affected by ASF.

Mr. Reyes said a process has to be followed before funds are released. Part of the process is for hog raisers to show that their animals died because of ASF.

“If a raiser’s pig died or is sick, a blood sample has to be extracted to ascertain if it was caused by ASF or not. There is a process to indemnification,” Mr. Reyes said.

“More than 80% of the P1 billion funds have already been released. Most of which were given in Luzon,” he added.

Mr. Reyes said the DA has been urging hog raisers in Visayas and Mindanao to deliver pork to Luzon.

He said that in 2020, around 200,000 hogs were transported to Luzon in an effort to boost pork supply.

Mr. Reyes also urged hog traders to lower their mark-up in order to bring downretail prices.

DA Assistant Secretary Kristine Y. Evangelista said in a Laging Handa briefing Friday that the retail price of pork has also risen because some growers shut down operations in the early stages of the pandemic and have not reopened since.

The ASF outbreak was first detected in provinces around Metro Manila in 2019. — Revin Mikhael D. Ochave

MARINA lifts freeze on accrediting maritime training courses, assessment centers

The Maritime Industry Authority (MARINA) said it lifted the moratorium on the accreditation of maritime training courses and assessment centers.

MARINA Administrator Robert A. Empedrad, in an advisory issued on Jan. 7, said the end of the moratorium was intended to bring about “fair and just competition in the delivery and conduct of training and assessment for Filipino seafarers.”

The moratorium covering training courses was issued in 2017 “in line with the proposed shift to the new rules and regulations in the accreditation of maritime training institutions, approval of courses and adoption of standards of mandatory training,” MARINA said.

In 2018, MARINA also suspended the acceptance of applications to accredit assessment centers, citing a review and revision of the rules and regulations for the process.

“MARINA assures the public that it continuously commits to produce globally competitive seafarers by maintaining the quality of maritime education and training in the country despite the rising number of confirmed cases of COVID-19,” the agency said. — Arjay L. Balinbin

ERC case rulings rise 21% in 2020 after adoption of video hearings, electronic filing

The Energy Regulatory Commission (ERC) said Friday that the number of cases it concluded in 2020 rose 21%, aided by the adoption of videoconferencing for its hearings.

In a statement, the ERC said it wrapped up 748 cases in 2020, compared to 617 in 2019. The commission said it also issued more orders, decisions, resolutions, notices, and certificates of approval and authority last year.

“The ERC continued to conduct hearings and conferences through virtual platforms to complete the legal proceedings that it should perform as part of its quasi-judicial functions,” the commission said in a statement.

Last year, the commission issued orders and advisories covering 10 rate reduction schemes, including the reduction in the system loss cap, which was lowered by P0.05 per kilowatt-hour (kWh); the refund of the over-recoveries of 64 distribution utilities (DUs) that amounted to P3.3 billion; and the lowering of the retail competition and open access threshold, among others.

In May, the ERC ordered DUs to allow their customers consuming 200 kWh and below in February to pay their power bills on a staggered basis of up to 6 equal monthly installments during the government-imposed lockdown – without penalty, interest or other fees.

The agency had implemented the “Amended guidelines on electronic applications, filings and virtual hearings before the ERC” to govern electronic transactions.

“The Commission has embraced the ‘New Normal’ and we are thankful that online platforms abound to be explored and utilized to the fullest. We were surprised and happy to note that this pandemic even provided us the opportunity to optimize the use of digital technologies to continuously perform and deliver our mandate,” ERC chairperson and chief executive officer Agnes VST Devanadera said. — Angelica Y. Yang

Fast track sought for measure closing POGO tax loophole

THE House of Representatives needs to fast-track a measure closing a loophole in a tax law authorizing the collection of a 5% franchise tax from Philippine Offshore Gaming Operators (POGOs), a senior legislator said.

Representative Jose Maria Clemente S. Salceda of Albay issued the statement after the Supreme Court granted the petition of 14 foreign-based POGOs to prevent the Bureau of Internal Revenue (BIR) and the Department of Finance from collecting the franchise taxes from POGOs, as outlined in Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II). The tax would have raised billions in additional revenue to boost the treasury for pandemic measures.

“They can’t say they are Chinese operations, because gambling is illegal in China. They are Philippine operations. And my bill closes the ambiguity by stating in black and white that they are in fact doing business in the Philippines,” he said in a statement.

Mr. Salceda, chairman of the House committee on ways and means, last year filed House Bill No. 5257, which seeks to impose a 5% franchise tax on all POGOs on gross receipts derived from gaming operations.

The measure also proposes a 25% withholding tax on foreign POGO workers with a minimum threshold of P600,000 per annum. The proposed tax rates would raise a total of P45 billion for the national government, Mr. Salceda said.

The proposed legislation should “sail smoothly” this month since the two chambers of Congress “both agreed on the POGO taxes in Bayanihan II,” Mr. Salceda said.

“My bill would make it a case of tax evasion to (neglect) reportorial requirements. There’s a very thin case for slapping POGOs with tax evasion in the current law.”

The BIR earlier reported that only 10 out of 60 licensed POGOs in the country paid tax. The Philippine Amusement and Gaming Corporation (PAGCOR) in mid-June last year confirmed that some POGO firms have left the Philippines due to the government’s restrictions on the industry and the impact of the coronavirus pandemic on business activity.

The gaming regulator has been pushing for the resumption of POGO operations during the quarantine. — Kyle Aristophere T. Atienza

Banks see wholesale/retail recovering fastest among hard-hit industries

Bankers said wholesale/retail will recover the fastest among the industries most heavily affected by the lockdown, while accommodation services and transport could take up to two years, according to a survey conducted by the Bangko Sentral ng Pilipinas (BSP) in the second half of 2020.

The BSP’s Banking Sector Outlook Survey (BSOS) also showed a consensus held by 65% of those surveyed that overall growth in the next two years could drop below 6% in the worst case, with 6.3% the other end of the range. This view represents a slight softening from the year-earlier survey consensus of 6-6.3%.

“Banks observed that the wholesale and retail trade sectors will be the fastest to recover in the next six months to one year. Transportation sector will take the longest time of about two years, while accommodation sector will take around one to two years to fully recover,” according to the survey findings, issued Friday.

The survey found that 68.8% of those surveyed expect the domestic banking system to be stable in 2021-2022, while a minority of 25%, mainly foreign lenders, expect a strong rebound during the period.

In the year-earlier survey, only 0.8% of respondents expected the banking system to strengthen over the near term.

“Banks’ positive economic outlook translated to renewed confidence in the stability of the banking system… The news of a high efficacy (more than 90%) of the COVID-19 vaccines, being developed and soon to be rolled out by leading pharmaceutical and biotechnology companies, partly buoyed banks’ risk-on sentiment,” it said.

The survey asked presidents, chief executive officers and country managers of universal, commercial, thrift, rural and cooperative banks about their outlook on the banking industry and the overall economy, considering the impact of the pandemic. The latest BSOS was the fourth since its launch in October 2018.

Around 60% of the respondents said they expect double-digit growth in their assets due to the prospects for an economic recovery, less than the 70% in the previous survey.

Some 71% of the banks also projected double-digit growth in their loan portfolio and deposits over the next two years.

Around 70% of lenders also expect net income to increase in the double digits, less than the 80% in the 2019 survey.

Estimates for return on equity were subdued, with 33% of bankers projecting less than 5%, compared to 11.3% previously.

“The slowdown in economic activities may have exerted pressure on the quality of bank loan portfolios. This could be seen in the increase of respondents expecting the ratio of non-performing loans (NPL) to total loans to exceed 3% in the next two years to 81.3% (of respondents) during the second semester of 2020 from the 67.4% in the previous survey,” the BSP said.

The central bank also surveyed the bankers on their projections for volume of restructured loans relative to their total loan portfolio, a new indicator included in the survey to measure the “propensity of banks to modify the terms of the loan when borrower is facing financial stress due to unforeseen events like the COVID-19 pandemic and natural disasters.”

It said 54.4% of the banks, mostly thrift banks, foreign banks, and rural and cooperative banks, estimated a restructured-loan ratio of 3% to more than 5% in the next two years, while 39%, mainly universal and commercial lenders, gave a range of less than 1% to 3%.

The survey also found that 49% of the respondents expect their NPL coverage ratio to hit 25-50% while 44.3% gave an estimate of 51-100%.

“In terms of products or services, the majority of the heads of banks mentioned that corporate and retail banking will be their top most priorities, followed by payments and settlement services, cross-selling, and trade financing,” the central bank said.

It added the top two strategic priorities of the banking sector are to grow their businesses and maximize the growth potential offered by technology. — Beatrice M. Laforga

Company leaders should embrace ‘infinite mindset’ and share their struggles — motivational speaker

“Ask for help and be there for others,” said Simon Sinek, author and motivational speaker, in his first blog post for 2021, which listed the silver linings and lessons that came out of 2020. “No one has the emotional strength to avoid the pain of trauma, and the way COVID-19 turned lives upside down is a trauma,” Mr. Sinek’s post continued.

The sentiment was a throwback to a talk in which Mr. Sinek—a person described as an unshakeable optimist—shared that he was not impervious to the trauma caused by the pandemic. 

At the Adobe Experience Makers 2020 event, he recounted that he began feeling off his game four months into the pandemic: His sleep pattern was disrupted, he didn’t want to get out of bed, and he started having one unproductive day after another. 

“I had to come to the realization that I was depressed,” Mr. Sinek said. “I was very uncomfortable with that word because it sounds like a diagnosis with a capital D.” He followed the advice of his friend in the military and faced his trauma by asking for help instead of avoiding it. “Though you may not be feeling it now, 100% of us have gone through trauma—which means that 100% of us are going to have to deal with the emotional cost of this trauma at some point.” 

It is important for everyone, he added, especially for leaders, to recognize when they are suffering through trauma and to be open about it. Being seen as a perpetual optimist can backfire, said Mr. Sinek, because other team members may feel like they’re doing something wrong.

Recognizing that everyone is going to go through trauma also leads to greater empathy across the board, which in turn makes it easier to offer help when needed.

PLAYING THE INFINITE GAME

At an organizational level, adopting an infinite mindset that also realizes that people are at the center of business will help leaders get through the other side of COVID-19. The mindset is based on theologian James Carse’s idea of finite versus infinite games. 

According to Mr. Carse, a finite game has known players, fixed rules, and is played for the purpose of winning. An infinite game, on the other hand, has both known and unknown players, changeable rules, and is played for the purpose of continuing the play.

From education to career, life is a series of infinite games, said Mr. Carse. A business likewise isn’t about beating the competition or being number one. It’s about staying in the game as long as you can, recognizing that your one true competitor is yourself, and improving year after year.

“We have ahead moments and behind moments, but we’ll never win or lose unless we fall out of the game,” said Mr. Sinek. “When the crisis hit, a total of zero companies woke up in the morning with an attempt to beat their competition. It literally didn’t matter anymore. Everybody woke up trying to stay in the game.”

HAVING A JUST CAUSE 

A crisis reveals the strengths and weaknesses of certain facets such as culture and leadership. It also reveals which mindset a company has. Those with a finite mindset, according to Mr. Sinek, tend to panic because all thinking happens in the past. These companies put themselves at the center of the equation and ask, “How are we going to survive? How are we going to make money?” 

Infinite-minded companies, meanwhile, are those that embrace uncertainty and pivot to address present challenges. They are customer-focused and say, “We have something valuable that people want. We have to find new ways to deliver.”

The motivational speaker added that having a just cause gives people a North Star, something to look towards and innovate against. Having a sense of purpose will allow a company to focus on the light at the end of the tunnel, a.k.a. the direction that matters. “That’s essential for driving innovation. We don’t want to innovate in every direction.” — Patricia B. Mirasol 

1...7,1257,1267,127...12,735Page 7,126 of 12,735
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube