norman t l chan : black bear – blue ocean – wanton noodle speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the hong kong management association fellowship award dinner, hong kong, 26 november 2013. * * * dennis ( sun ), alfred ( chan ), victor ( lee ), ladies and gentlemen, 1. i feel very honoured to have been invited to speak at the hkma fellowship dinner tonight. this is not only because the hong kong management association has been a forerunner in enhancing the standards of management and governance in hong kong, but also because the hong kong management association and the hong kong monetary authority share the same initials “ hkma ”! hence, attending the fellowship dinner tonight has double meanings for me as the chief executive of the hkma. 2. management is crucial as it embraces knowledge, skills, culture and leadership that would guide and shape the future of an organisation, whether it is public sector or private sector body or whether it is profit - seeking or non - profit - making entity. there is no doubt that, with increased globalisation and technological innovation, markets in different geographical localities have become more interconnected. one author has described the phenomenon as the “ world has become flat ”. 3. an important outcome of the interconnectedness of markets is that competition has become much more intense and ferocious. talking about competition, let me share with you this story. 4. one day two men went together hiking in the mountain. while happily walking and talking, they bumped into a giant black bear which was apparently in a bad mood and in need of some nutritious food. even though this was their very first encounter of a big bear in the wilderness, the ferocity displayed by the bear cast no doubt in their minds that their lives were at stake. so the two of them ran as fast as they could downhill and soon they reached the flat land at the bottom of the hill. unfortunately the bear appeared to be quite determined to get the catch of the day and was chasing them from 50 yards behind. suddenly one man stopped running and took out his running shoes from his knapsack to put them on. the other guy was very puzzled and asked : “ what are you doing, you stupid? i don ’ t think you can run faster than the bear even with your running shoes on! ” the other guy replied : “ yes, i know this. but it would be good enough if i can run faster than you

had kept on falling. when they first set up the noodle shop, they were very serious about every minor detail – they scouted the new territories to source the best quality flour to ensure that noodles were chewy. the husband went to the fish market at dawn to buy the fresh shrimps for the wonton and the wife woke up at four in the morning to make sure the soup base ( [UNK] [UNK] ) was properly prepared. but they both had ceased doing that when the noodle shop business was doing well and such daily routines were no longer practised. so the noodles were no longer as chewy as before and the wontons were no longer tasty. as for the cafe and hot pot meals, they had very little idea on how to do them well and eventually their customers, one by one, turned away from the shop. 9. the takeaway of this story is that very often that market conditions or customer needs have changed and so we have to adapt. if a company does not or cannot adapt, then bad outcomes would ensue. however, it is more often the case that the formula and values leading to success in the past have been inadvertently eroded, if not forgotten totally. the couple in wanchai should not have forgotten what drew customers to their noodles in the first place. they had failed not because their customers had decided to eat sandwiches rather than noodles but because they forgot that it was quality that made the noodle shop bis central bankers ’ speeches successful in the first place. very often we become complacent and take things for granted after we have been successful, just like the wanchai couple did. shifting to a new product line in which we have no real expertise or niche was a recipe for disaster. the same holds true if we look at what made hong kong tick twenty or thirty years ago. many good qualities such as can - do spirit, never - say - die, openness and versatility that were cherished by hong kong people in the past seem to have faded away. keeping these good qualities, hong kong can hope to maintain its competitive edge even when the goings get rough. 10. ladies and gentlemen, the message i have for you is : while an entrepreneur should always strive to expand and grow his business, it is equally important that he should resist complacency and continue to excel in what he is doing or what he is good at. to venture into an unfamiliar universe in which one has no expertise or advantage is risky