For some readers, the new rules of market leadership will be intuitively appealing. To others, they will raise stubborn questions. How can a company offer the best value proposition in the market (read: give its products and services away), and still make more money? How can a company provide a better customer value every year and still make money in the long run? Won’t you burn out your employees if you’ve never satisfied with the level of value you offer—if you’re on the treadmill of ever-expanding ambition? Isn’t delivering value to customers in potential conflict with delivering value to shareholders?

We think not. In fact, for market-leading companies, like Sun Life Financial Philippines, customer value, shareholder wealth and employee satisfaction move in lockstep. This company views customer value as the indispensable source of both shareholder value and employee satisfaction. Without customer value, there is no sustainable business.

Some readers will ask what’s new and different in our perspective. How does it relate to accepted wisdom that learning organizations, customer loyalty and core competencies—to name a few of today’s popular notions—contain the answers to all management woes? Our conclusion is that none of these notions goes to the heart of what sustains success in a competitive marketplace. At best, they provide partial solutions. Their relevance depends entirely on whether and how well they are channeled toward the pivotal issue of increasing value, year after year.

The story of Sun Life Financial shows in detail the power of the operational excellence-value discipline. By building disciplines in its three product lines—life insurance, preneed and mutual funds—Sun Life Financial leaped in a matter of months to market leadership. So efficient was its operating model that it prompted fierce competition in the industry. The competition, in turn, squeezed in profits and spurred consolidation.

In the Philippines Sun Life Financial is one of the largest and most trusted financial services organizations, tracing its roots back to 1895. The company has remained committed to the Philippines through political and economic ups and downs, and has served generations of Filipinos in their journey to achieving financial stability.

Through the years, it has never looked back as it surged ahead of the competition, creating customer satisfaction while delivering on commitments via service-technology breakthroughs.

Making core products shine

For investors who have neither the time nor inclination to manage their own funds, the instrument of choice is an ever-growing pool of mutual funds. Unlike other investments where success or failure depends on the investors’ fund-management skills, mutual funds allow their clients to relax, leaving the business of day-to-day investing to a team of professional managers.

“Mutual funds are aimed primarily at people who have money, but no expertise in investing them,” says Sun Life Philippines president and chief executive Henry Joseph M. Herrera, FASP, in an interview. Investors’ funds are pooled together to give the fund manager the leverage to earn higher returns. The funds are invested according to a risk profile that the investor agrees to when buys into the fund.

“You can invest in mutual funds for as low as P5,000,” Herrera adds.

Sun Life Financial has seven different mutual funds offering a wide range of investment options for clients depending on their appetite for risk. Because of their nature, however, mutual funds do not guarantee protection of an investor’s principal. Depending on the skills of the fund manager, mutual funds can earn above-average yields, but may also lag behind market performance.

Herrera boasts that Sun Life funds are performing well. Gross sales grew by 178 percent from the previous year’s level. “There is growing acceptance in investing in nontraditional investment, such as mutual funds for the long-term investible funds,” he says.

For the same period, Sun Life’s total life-insurance premiums grew by 60 percent. Total first-year and single-payment premiums posted a robust growth of 325 percent. Its preneed business, on the other hand, managed to increase its total installments by 22 percent.

Herrera stresses that consumers have become more discerning with the companies they entrust their hard-earned money for their retirement or their children’s education. “The concept of ‘flight to quality’ is more punctuated with Filipinos now being more inclined to finding a stable company that they can trust,” he notes.

The main advantage of Sun Life, according to Herrera, is that the company offers three product lines. “We encourage our agents to cross-license among our three product lines. An agent who approaches his [insurance and/or mutual fund] client can offer our preneed products for the education and pension needs of his family,” he says.

Fast and efficient service, and easy access to the company’s products and services can be availed through agents, customer sites, call centers, interactive voice response system, SMS or texting, malls, banks and through the Internet.

Life at the top

An actuary by profession, Herrera has spent some 27 years of his working life in the insurance and financial services industry. He has gained a wealth of experience in providing security and protection to Filipino families and making people’s money grow for their future needs.

And what exactly is in Sun Life’s future according to Herrera?

“We will be the biggest and most admired in the lines of the businesses we choose by 2010,” he states.

The 1-1-1 strategy that was discussed in the company’s planning session in September 2005 would remain to be a long-term plan of Sun Life.

One of Herrera’s foremost strategies to lead Sun Life to this pinnacle is the bottoms-up and top-down approach to decision-making. He says that the decentralized manner of making important choices for the company has worked and will continue to work for him.

Never forget, he tells his staff, to go the extra mile for the customer. What’s different with this company is that the management and staff make a continuous, painstaking and unrelenting effort to get everyone to walk in the customer’s shoes—to experience what the customer experiences, to feel the way the customer feels. Living with customers raises employees’ sensitivity to their own products and services, not just at the time purchase was made but after the newness has worn off.

It seems Herrera has something else up his sleeve. The far-ranging vision. The meticulous detail. Macro. Micro. So far, at least, he is enjoying the ride.

Maintaining thresholds of performance

For some readers, the new rules of market leadership will be intuitively appealing. To others, they will raise stubborn questions. How can a company offer the best value proposition in the market (read: give its products and services away), and still make more money?

Notes to a tragedy

In the next few weeks we shall witness a torrent of sorrow and regret, as any such horrific loss of life should provoke. But, clearly, the story is unfinished, despite the seeming finality of Benazir Bhutto’s murder.

Authorities pressed doctors to stay mum on Bhutto’s death

RAWALPINDI, Pakistan—Pakistani authorities have pressured the medical personnel who tried to save Benazir Bhutto’s life to remain silent about what happened in her final hour and have removed records of her treatment from the facility, according to doctors.

Lending a hand

At the fringe of Makati’s bustling business center stands the head office of Makati Finance Corp. (MFC), a consumer-finance company that has established a stronghold in the industry for over 40 years.

Winning: A year of pushing hot buttons

About this time last year, we received an e-mail from a reader who asked if we believed America’s competitive success was linked to its relative lack of corruption.

INVESTOR BRIEFING

WATER is still flooding the basement of a shopping mall in the Philippines’ central business district after an explosion in October. At least nine died and more than a dozen businesses were kicked out from their glass-walled shops now wrapped with white-painted boards.

REDUCING POWER COSTS

The government of the Philippines plans to use state funds to address high power rates. Acknowledging it must do something about the rising cost of energy, the government announced that it intends to use more of the state’s gas royalties, National Power Corp. (Napocor) profits and Wholesale Electricity Spot Market (WESM) fees to reduce electricity charges.

RISING GDP

The Philippines’ robust economy continues to perform well, achieving a GDP growth of 6.6 percent in the third quarter of this year.

Brotherly love

Brother International Philippines believes competition makes business more exciting. And the company thinks there is still a space for one more player in the document-printing market in the country that can provide an alternative.

Winning: Breaking Through Bureaucracy

Q: How do you break through the bureaucracy that damages so many organizations? James Moss-Solomon, Bridgetown, Barbados                 

A: Damages? How about deadens?

PLAYING ALONG

TO many children, Elmo, the much-loved furry red monster from Sesame Street, is more than just a plaything. To children ages two to five years old, Elmo is a trusty playmate—a friend to lug around the playground; one who won’t complain when hugged, pinched or smothered with kisses. For parents, Elmo even makes a good teacher.

TOY TEST 2007

The holidays are just about here, and the toys are piling up in stores, waiting for you to make your list. Of course, even if your wish does come true, you have to hope for the best: That really great-sounding toy might be a piece of junk.

CONSUMER CONFIDENTIAL

This should be the time of year when Santa’s wholesale elves in the toy district in downtown Los Angeles are busy delivering cheap, Chinese-made playthings to consumers and retailers.

Lumads in the new world

It was a minifair compared with the grand bacchanalia that is the Kadayawan Festival that Davao City has come to be known for.

Mission: global customs service

Del Castillo: From what I have gathered, Commissioner Morales is a self-made man in this career; he supported himself through college while working at the Bureau of Customs as a utility man.

No run of the mill success

Management is a practical discipline measured by financial returns and competitive position. But it is easy to forget that success in business ultimately comes from a commitment to personal values. When you look at Metrobank today, the tendency is to focus on its results, its size and its position. It is easy to overlook the elements that shaped its character.

Winning: Private equity’s very public problems

Q: Why are so many private-equity deals blowing up? Alan Engle, Great Neck, New York                 

A: The short answer is that the world has changed (read: the US sub-prime-mortgage mess has erupted). A lot of companies that were once hell-bent on acquiring hot new properties suddenly want out of deals that are starting to look too cold for comfort.

A Queen Stumbles

HIS eyes stared upward as he started with that familiar tuneful articulation about Iloilo at the peak of its grandeur. A few minutes later, his voice turned wobbly as he recounted how the province slipped from prominence. “So we lost our label being the country’s Queen City of the South.”

Teacher’s pet

WHY am I passionate about Vietnam? Because Vietnam has proven to the world that it is possible to simultaneously achieve robust and sustained economic growth with equitable income distribution. 

Putting imagination to work

SOON after World War II, from 1941 to 1945, the Philippines experienced a decade of unprecedented growth in the 1950s, with Manila—despite being the most devastated city during the climactic battle era—slowly regaining its vigor to once again become a center of industrial progress.

Five steps to building your personal leadership brand

You have a personal leadership brand. But do you have the right one?

A leadership brand conveys your identity and distinctiveness as a leader. If you have the wrong leadership brand for the position you have or the position you want, then your work is not having the impact it could.

What Health Consumers Want

Consumers of health care constitute a market that is as diverse as a market can be, yet the idea that companies might profit by segmenting customers to address their varied needs seems almost foreign to the health industry, despite the billions of dollars at stake.

How Bayan got its voice back

Bayan Telecommunications’ Tunde Fafunwa is very enthusiastic nowadays because the Lopez-controlled company has risen from its low point. And the source of his excitement is largely due to the recent introduction of Span, Bayan’s wireless landline service.

Winning: Managing shooting stars

Q: How far should I go to keep a star performer who has an offer to work at a competitor? Hymie Betesh, New York                 

A: Not as far as you’re probably considering, we imagine, given the panic that strikes most managers when a star threatens to shoot out the door.

Lighting the way

Dutch electronics and lighting giant Philips Electronics has been continuously doing business in the Philippines for the past 50 years.

In the name of the people

THIS time around, former Navy officer and neophyte Sen. Antonio Trillanes IV left no room for ambiguity.

In his 2003 debut at the Oakwood mutiny, then-Lt. Senior Grade Trillanes hemmed and hawed about his intentions.

Water Is Life

FOR corporate do-gooders, corporate social responsibility (CSR) is just the start. The new trend among large and well-established corporate organizations is to integrate sustainable-development programs—not just mere philanthropic activities—to their core businesses.

Give your team a challenge they can’t resist

It’s not easy pulling a group of diverse individuals together to work as a team. Barriers abound in the form of fierce territoriality, incentive systems that reward individual rather than collective achievement, and mistrust spawned by an acquisition, merger or major internal restructuring.

Improve your return on returns

Competitive pressures have forced many retailers and manufacturers to liberalize their returns policies in recent years and gladly accept for a refund just about anything customers regret having bought.

A staged solution to the catch-22

Companies launching two-sided platforms—businesses that connect two groups of users, as credit-card companies do—have often subsidized one group to get it to use the platform. This is a risky approach, because it requires a big upfront investment.

Ship shape

For an employee, a company-sponsored overseas trip could mean mostly fun, with, of course, some work in between. For a chief executive of a company, however, it would be the opposite, and most of the time the fun part takes place in between working or not at all.

Winning: Stay the course…especially if it’s a new one

Q: Sometimes companies need to change even when there is not a crisis forcing the issue. In such cases, how do you keep your people excited about a change initiative after its newness has worn off? Trevor Smith, Singapore

A: You have to stay excited yourself. And not just excited, but obsessed.

If I had a hammer

HASHIM squinted before pulling the trigger. Although the 19-year-old is used to holding Soviet-made AK-47 assault rifles in the deep jungles of Mindanao three years back, this particularly weapon was new to him.

Big failure, little dreams

CASTELLANA, Negros Occidental—It is already past noon and yet Edelyn Pineda is still lazing around Sitio Odiong here along with her little friends.

The Morning Meeting: Best-practice communication for executive teams

Does your company’s executive team struggle with chronic communication problems and a lack of shared accountability? Many times when my colleagues and I are called in to help out an organization, we find that these two core issues underlie their problems.

Lessons from the leaders of retail loss prevention

Preventing theft, damage and errors such as food spoilage has long been an unyielding and poorly understood problem for retailers. But a few companies stand out in their ability to limit losses, and if every retailer were as successful as they are, the sector could save billions of dollars annually—as much as $27 billion in the United States alone.

The Jock Correlation in business

WITH many sports headlines today trumpeting organizational and solvency issues with various teams and sports associations across the world, there is often an almost missionary zeal to bring to sports a more “business approach.”

Winning: Developing a successful succession plan

Q: What companies would you hold up as examples of succession planning done right? Robert Handfield, Raleigh, North Carolina 

A: It’s sad to say, but your question would be a heck of a lot easier to answer if you had asked for examples of succession planning done wrong. That trend is gaining such ground these days it’s alarming.