Opinion: Singapore Inc. leaders need to rethink innovation or die trying

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It came as a surprise to me when it was announced that Ng Yat Chung has been appointed CEO-designate for Singapore Press Holdings (SPH), the nation’s print organization that’s now a diversified group of media, property, and healthcare businesses.

Ng’s last corporate assignment was CEO of NOL, the nation’s once proud sea liner. During his five-year tenure, NOL accumulated more than US$1 billion in losses until it was sold to French CMA CGM.

SPH is now struggling as it faces declining revenues in traditional print advertising over the last four years. With Ng at the helm, will SPH see a leader whose experience and leadership are enough to innovate and take on its disruptive online and social media competitors who are winning in mindshare and revenues?

There’s also a larger issue on hand: Do the business leaders of Singapore Inc. (a colloquial term used to describe the Singapore-based entities of large market capitalization) have the right innovative mindset to take on the world’s technology disruptors? These are leaders who headed traditional established businesses, very few of which I would presume ever did a startup from scratch and brought it to success.

Under fire

In its short history of 52 years, Singapore built global high-value companies through careful and clear leadership. Names like Singapore Press Holdings, Singapore Telecoms, Singapore Airlines, Development Bank of Singapore, ComfortDelgro Group, CapitaLand, Singapore Post, and City Development Limited are just some of the 100 entities listed on the Singapore stock exchange and have market capitalization above US$720 million.

But now, the world has changed. Technology cycles are shortening very quickly. Singapore Inc. companies are under siege not only by global competition but also by the onslaught of technology-disruptive startups stepping into their doors and eating their market share.

In less than eight years since their founding, the likes of Grab and Sea (formerly Garena) are all boasting valuations of US$3 billion or more in their recent funding rounds, surpassing listed companies which took decades before they reach where they are now.

No company is spared from disruption

With thousands of pitches I’ve heard and by providing advice in the last six years, I see that literally, every vertical is target for disruption, with startups and their innovative methods breaking the hold of incumbent players.

There are so many of them:

• fintech companies aiming to be the payment solution providers in Southeast Asia
• co-working spaces vying for a piece of commercial rentals
• ecommerce players reducing the demand for retail spaces from the REITs (real estate investment trust)
• media content streaming companies reaching anyone who has internet access
• companies looking to uberize services that do not require heavy investment in assets

We understand that the success rate is one percent, but that one percent of startups can do serious disruptions.

With my previous startup, I recalled my conversations with the incumbent local transport companies. The engineering and maintenance teams shared that they were incentivized in keeping the status quo rather than accepting new innovative products. In short, they were paid to “keep the engines running” rather than find new ways to save costs and generate revenue.

Today, one of them, SMRT, is in talks with Grab to sell their taxi business. They have also lost out in all bus tendering services in Singapore. I will leave you to decide whether maintaining status quo is the best way to go.

How Singapore Inc. leaders can up their game

Conclusion