Innovation amid disruption can reap long-term benefits, say industry players
Christopher Ong, managing director and senior vice-president, DHL Express
Vick Aggarwala, president and chief executive officer, Supreme Components International
J. Heinrich Jessen, chairman of Jebsen & Jessen Group
Edwin Chow, assistant chief executive officer (Innovation and Enterprise), Enterprise Singapore
Q: How can innovation help to transform businesses in the long run, and what limitations might there be?
Ong: As cliched as it sounds, the only constant is change. What Covid-19 has shown is that organisations that are prepared to embrace change to innovate and transform amidst disruption can thrive. In the long run, innovation enables companies to streamline vital processes and automate time-consuming repetitive tasks, which in turn improves productivity and efficiency.
While innovation has the transformative potential to spur businesses to greater heights, a potential risk is that it can come at a significant financial cost, and organisations should not innovate for the sake of innovation. To mitigate this and ensure sustainable transformation, companies need to strike a delicate balance between their appetite for growth and innovation, and their focus on their core value proposition.
DHL Express has always prided itself on being an organisation at the forefront of innovation. Take, for example, our automated guided vehicles, which were introduced in 2016 to enhance our operations. This robotic solution has replaced the need for forklifts and has enabled highly precise movements of heavy and large shipments, thereby eliminating human error and making our operations safer and more efficient for employees.
Chow: Innovation can power even the smallest business to success. If harnessed well, it allows businesses to meet new needs and compete beyond pricing. This is critical for companies with global ambitions. To do this, companies will need to develop new business models, products or innovative solutions, and own the intellectual property to it.
Homegrown seafood trader Fish International Sourcing House offers a good example of how a company, even in the most traditional of sectors, can benefit by investing in innovation. The company plans to set up a 240,000 square foot seafood processing and innovation centre in Singapore to conduct research and development (R&D) on fish waste conversion and plant-based seafood to drive revenue growth in new business segments.
Aggarwala: Innovation can completely change a business that has a macroeconomic advantage due to Covid-19. Innovation in a business doesn’t always need to be transformational or disruptive – even incremental changes can cause a great shift with desired consequences. If you have the resources, only external and uncontrollable factors can be construed as actual limitations.
Let me share some examples of how we have innovated by reviewing our technology. First, we created a centralised dashboard that gives sales reps access to hundreds of suppliers who carry stock for semiconductors and electronic components. Second, we used artificial intelligence (AI) to capture incoming supplier emails offering stock and consolidate them into a repository that all sales reps can access. Third, we developed an automated batch email system enabling sales reps to quickly and efficiently e-mail hundreds of suppliers for quotes.
Q: Did the Covid-19 pandemic spur greater adoption of tech-based solutions in your company and across your sector?
Jessen: While the conceptualisation and early implementation of some of our back-office transformation projects took place before Covid-19, the bulk of the roll-out coincided with the pandemic’s peak period. One might have thought that the restrictions put in place to contain the spread of the virus would impede our project roll-out, but we experienced the opposite.
It was because of the restrictions, not in spite of them, that a far more in-depth as well as far-reaching level of enterprise resource planning system usage followed. For example, the circuit breaker here in Singapore provided conducive conditions for people to do away with remaining paper-based processes. Obviously, we experienced the same efficiency gains as most other companies when it came to adapting our travel and meeting habits.
Aggarwala: For us, Covid-19 was the catalyst that accelerated our R&D efforts and adoption of newer technologies. As business slowed down, we knew that it was time to reset and prepare ourselves, in terms of resources, to capitalise when things get better. One must invest when the “chips” are down.
Our company’s desire to go global into countries which were hitherto unexplored, coupled with the worldwide travel restrictions, prompted us to use creative ways in the form of public and automated tools, to gain access to hundreds of leading manufacturers and contracted companies. This worked out great, as these companies were also waiting for a reliable and quality supplier to meet their component sourcing needs.
Ong: The pandemic definitely spurred greater adoption of tech-based solutions for us and our industry. Before the pandemic, DHL Express was already in the midst of digitalising our business as part of our Strategy 2025. With the onslaught of the pandemic and the need to overcome the challenges that arose, our speed of digitalisation went into overdrive. It changed the way we work and how we interact with our customers, especially at the height of the pandemic restrictions.
Being in the logistics sector, this was no easy feat, to say the least, especially with the synchronisation required between different functions and operations globally. We were driven to adopt contactless delivery and contactless payment, and fast-tracked our roll-out of technologies like live chats and digital assistants, which arguably mark the way of the future.
Chow: Efforts to drive digital transformation had already begun pre-Covid-19. But the pandemic accelerated the push for enterprises to adopt tech-based solutions to cope with supply chain disruptions, changes in consumption behaviour and work-from-home requirements. Such tech adoption helps businesses work smarter and more efficiently, freeing up capacity to focus on other important areas of the business.
We see this happening across all sectors at varying levels, be it the more traditional and service-oriented, or more tech and digital-related sectors. More and more, we see AI and robotics being used by manufacturing and facility management sectors to improve efficiency and optimise manpower, while technology has transformed the way education and healthcare are delivered to students and the general population.
Q: What are some key reasons holding back companies from innovating? Where can they seek help or guidance?
Ong: Innovation requires both mindset and structural change. For innovation to take root, the leaders of the organisation need to truly embrace digitalisation and disruptive change. Leaders need to be brave in taking on this new mindset and bringing the rest of the organisation along with them, which can be very daunting as there is always the risk of failure.
Secondly, many organisations have deeply entrenched structures or processes that have allowed them to be successful thus far. They are also highly hierarchal in nature. However, in the case of digitalisation, oftentimes the best innovations can be found at the front lines of the business, which face the rapidly changing needs and demands of customers. Thus, there is a reversal of roles when it comes to innovation, and corporate leaders need to have the humility to accept this reversal in order for innovation to be sustained and successful.
My advice to companies seeking to digitalise and innovate is to just take the first step. Be it using online platforms to market their products, to making and accepting digital payments, each organisation will have its unique situation. Should they require more assistance, there are various programmes developed by EnterpriseSG, the Infocomm Media Development Authority and other agencies they can tap.
Jessen: There are a few reasons holding companies back from innovating. First, if a blame culture exists in a company, people will spend a disproportionate amount of their attention and effort on avoiding mistakes and they will tend to receive suggestions for improvement defensively and with suspicion. Such a culture kills innovation.
Second, when the business is running well, it is very tempting to allow complacency to kick in. We subconsciously adopt an attitude of “if it ain’t broke, don’t fix it”. The absence of a crisis therefore requires extra effort to maintain an innovative mindset.
Aggarwala: Firstly, the attitude – or lack of it – towards change is the major stumbling block. If the mindset is indeed ready to accept innovation, the lack of qualified and experienced talent is the next hurdle they face. In these cases, companies should look to be flexible and have a more open hiring culture.
Supreme, for instance, readily employed interns and freelancers who are passionate or specialised in certain core areas to move projects forward without allowing for any bottlenecks. Companies should also capitalise on Productivity and Innovation Credit schemes offered by the government. Approaching the various chambers of commerce and EnterpriseSG can also open up new opportunities.
Chow: Smaller companies may have less resources or lack the people and knowledge to drive innovation within their companies. However, we have partners such as IPI Singapore and Centres of Innovation, which provide technical facilities and expert advice to help uplift companies’ innovation capabilities or co-develop new products.
The Innovation Advisors Programme run by IPI allows industry veterans to share knowledge and use their networks to help companies develop innovation capabilities in-house. To alleviate part of the talent demand, the Innovation and Enterprise Fellowship programme by EnterpriseSG and the National Research Foundation trains researchers, scientists and engineers to develop commercialisation skills through on-the-job training and attachments with private sector partners.
Companies may also find it challenging to identify market gaps that can be converted into innovation opportunities. Such companies – those seeking solutions and those providing solutions – can make use of initiatives such as EnterpriseSG’s Open Innovation Challenges to identify problem statements and work together on new innovations to plug market gaps.
Q: What considerations should companies bear in mind before starting on their tech/ innovation journey?
Ong: Begin with the end in mind. While the innovation journey holds great promise, it is also fraught with pitfalls and minefields. Thus, companies and leaders need to be clear on what is their end goal so that they can be guided by it as they face hurdles on this journey. This will allow them to strike the right balance between resources and the appetite for innovation, when they are faced with challenges amidst keeping the business running.
In line with our Strategy 2025 goal of delivering excellence in a digital world, our digitalisation initiatives must improve customer experience, employee experience or operational efficiency. With these goals firmly in view, Deutsche Post DHL is investing over 2 billion euros (S$2.81 billion) on digital transformation projects from 2021 to 2025.
Chow: Determine the purpose and gap. Innovation can happen at any part of the value chain, from product development to business models or processes. Companies should first review their entire value chain, identify the potential innovation opportunities and what they want to achieve – be it to build a differentiated product, or capture a new market demand.
Start small and stay focused. Innovation can be done in small steps and investments need not be huge. Stay targeted after determining the gap and work on developing a solution that addresses industry needs.
Leverage available resources. There are plenty of places that offer help. Those who lack the technical know-how or facilities should leverage existing infrastructure to get started.
Collaborate. This can be an effective way to reduce risk and enhance efficiency in the process. Partnering others means you can tap ideas, networks and complement each other’s capabilities, thus bringing your products to market in a much shorter time.
Jessen: As with all corporate initiatives, starting an innovation journey will not work without active, meaningful support from the top. As company leaders, before we proceed with any transformation project on a major scale, we have to decide whether we really want to see through the changes when the going gets tough, whether we will “sing in tune” with those colleagues tasked with implementing the project, and whether we are willing to step in actively to help overcome instances of resistance that will invariably appear.
Another important consideration is talent selection for the project. The implementation of an innovation journey requires a team made up of top-notch people. When we implemented our back-office transformation project, we had a leadership team consisting of both long-serving Jebsen & Jessen stalwarts, as well as new hires, who brought with them the necessary experience from having worked in an environment in which the outcome we were seeking had been achieved.
Aggarwala: Companies should identify the real gap in their productivity or market outreach. Also, leadership skills are critical to unlock entrepreneurial growth. In the quest for change, companies should be ready to take a small hit or loss, in the pursuit of long-term gains.
Q: What more can the government, trade associations or other organisations do to encourage companies to pursue innovation?
Chow: Innovation is often a two-way exchange of ideas and know-how. Hence, our priority is to ensure Singapore has a robust ecosystem that sees active participation from investors, researchers, accelerators, corporates and startups, so that innovation can take place seamlessly.
The Singapore Week of Innovation and TeCHnology (SWITCH) is an example where we create a platform for the community to come together, learn about the latest trends and needs, and catalyse partnerships. To drive more cross-border innovation, we also work with in-market partners on co-innovation programmes to support joint projects, as well as Global Innovation Alliance acceleration programmes to help companies find opportunities and partners.
Collaboration plays a key role in speeding up innovation. Our ask is for corporates, SMEs and startups alike to come forward, keep an open mind – be willing to share problem statements and test out new ideas to develop viable solutions.
Aggarwala: Other than government grants, public institutions can find creative ways to give or design free tools that are fundamental to growth and innovation. For example, every innovation-centric firm knows that reading emails with AI will help productivity and growth, as email automation is paramount given the complexity and number of incoming emails. Offering software or tools to minimise paper usage – such as those which allow editing of scanned documents, PDFs and so on – can also help companies towards going green, amidst the rising problems posed by global warming.
Jessen: There is an endless list of schemes and grants on offer here for those willing to implement innovative transformations. The government has made available infrastructure that creates conducive conditions for innovation, from building a relevant and suitably qualified talent pool, to fostering R&D collaboration with first-class research centres.
Trade associations do their bit to provide relevant networks and inspiration through trade shows and conferences. I’m not sure that “more” is what is needed. So much has already been done to lead the horse to water, and at some point the responsibility to drink falls to the horse.
Source: The Business Times © Singapore Press Holdings Limited. Reproduced with permission.