(Oct 2): As far as business strategies go, Robert Yap has an unusual mantra: Keep it sexy.
It has been nearly four decades since Yap took over his father’s transportation business and transformed it into the technology-centric logistics company YCH Group. But the 64-year-old executive chairman still has a keen appetite for innovation. Dressed in an electric-blue striped shirt, with leopard-print collar and cuffs, Yap muses on the need for businesses to stay youthful and agile.
“Product cycles are getting shorter, and we need to keep innovating as we go. There is no standard formula for a business. You just have to be adaptable and gutsy,” he says. And the winners of this year’s EY Entrepreneur Of The Year (EOY) awards offer great examples of how to build a sexy business.
Yap, who chairs the judging panel, notes that the winners ushered game-changing technologies into the market, from virtual teller machines to industrial robots and the deployment of the Internet of Things for ships.
This year’s winners include key management from maritime technology solutions provider Ascenz, components manufacturer Nanofilm Technologies International, precision engineering company PBA International and trusted services company JK Tech Group. The latter was recognised for its innovations in fintech enablement — the first time that the EOY awards has recognised this segment.
Meanwhile, Tolaram Group, which deals in sectors including consumer goods, energy and digital services across Africa and Asia, clinched the EY-Barclays Family Business Award of Excellence.
While the judges did not look specifically for technology-centric companies, Yap says it is hardly surprising that those keen to innovate clinched the top honours. This is because there is a correlation between “moving up the value chain” and generating solid financial results.
“We tried to pick entrepreneurs who have some real business value and at the same time are willing to play with tech, able to be ahead of their time and dare to win,” Yap says.
Overcoming first-mover fear
Innovating is about more than just implementing or reselling the latest technologies, though. Yap points out that in many traditional industries, it takes time for incumbents to warm to new, more efficient methods. “In any kind of innovation, there’s always a point of inflection. You could’ve thought of something, but it’s too early and there are very few believers; or maybe they are just not in a hurry and don’t think it’s a necessity yet,” he says. “But there will come a point of time when it’s ready to take off.”
In the case of Ascenz, the company has been providing data solutions to the maritime industry since its founding in 2008. But it was not until quite recently that the industry started embracing technological disruption. The judging panel recognised Ascenz’s good sense of timing in rolling out its innovations and getting clients, both MNCs and start-ups, on board. These efforts were led by the company’s CEO, Chia Yoong Hui, and chief technology officer, Sia Teck Chong. The panel also noted that the company — the youngest among the winners — contributes towards Singapore’s push to remain a maritime hub, which Yap says made it “special and deserving”.
Another company that pioneered innovations in its industry is Nanofilm, which focuses on the niche market of high-quality vacuum coating applications. Its main value lies in its IP-protected innovation developed by its CEO, Shi Xu, which Yap cites as a differentiating factor. “There are very few companies in the world today that can have their own IP,” he says. “Today, Apple is one of Nanofilm’s major customers. And now they are also selling to automotive companies. So it shows that their technology is able to go into different value chains.”
Sometimes, being a first mover involves jumping into a totally new industry. That was what JK Tech group CEO Lennon Tan did, Yap says. Originally founded in 1984 as a specialty printing company, JK Tech has since diversified into fintech solutions, including virtual teller machines, telco cards and wireless payment. While Tan started the company in China with savings of just $300,000, JK Tech now has assets of about US$250 million ($340 million).
Over the years, Tan built relationships with the banking sector. These relationships opened doors for him into the trusted services segment, at a time when fintech was gaining popularity, Yap says. It was also impressive that the company had made strides in a space dominated by young and lean start-ups. “JK Tech had the ability to be there at the right time and right place,” Yap says. “I think that was a very smart move, and that’s where we actually gave a lot of credit to the company.”
All in the family
Beyond technological innovation, EOY also recognises excellence among family businesses. As the head of a family business himself, Yap believes that there is a need for more success stories in this segment. “There are many family businesses in Asia, but the success rate is not high enough. We need more role models.”
One such role model recognised in the EY awards is PBA CEO Derrick Yap, who took over the business from his father. While PBA started out distributing mechanical products about 30 years ago, under Derrick’s leadership it has since moved into advanced manufacturing and robotics, which Yap reckons is well “ahead of the trend”.
PBA’s story is a good example of how the younger generation can transform the family business into something edgier rather than sticking with the tried-and-tested, Yap says. “Many second-generation entrepreneurs may not be willing to take over the family business because it seems boring. Even I was like that at one point,” he concedes. “But what we are trying to tell them is that it doesn’t have to be like that. Instead of starting your own business from scratch, why not build on your family brand? Derrick did well in not just changing his family business, but also moving it up the value chain. So we thought that was something worth awarding.”
Tolaram, on the other hand, exemplifies how a diversified group of companies could be run efficiently by a single family, Yap says. Starting out as a humble textiles business in post-World War II Indonesia, Tolaram eventually diversified into real estate, consumer goods and paper products, among other sectors. It also made headway into African markets such as Nigeria.
The group’s ability to expand and clinch partnerships with global MNCs is commendable, Yap says. “[For] any kind of family business, you must be able to grow globally and be of international repute. So you must have international partnerships to show that you are relevant and leverage on your partners’ value chains.
“We hope more business can go along that line. Family businesses should not be shy. They should focus on leaving legacies.”
No guts, no glory
Whether in a family business or otherwise, business success always boils down to having good leadership and a sense of adventure, Yap says. And this is something that will not change even with technological disruption.
All the EOY winners this year have demonstrated resilience and a risk-taking spirit, he says. JK Tech’s Tan, for instance, quit a cushy job at 3M to strike out on his own. And Nanofilm’s Shi took a leap of faith from academia to entrepreneurship. “If these people didn’t take any risks, we wouldn’t have chosen them,” Yap quips.
But in a market saturated with new innovations, how can entrepreneurs differentiate between passing fads and innovations with real value? Acknowledging that this may be difficult, Yap suggests having a stable, profit- generating business before venturing out into less familiar territory. This is especially important for those who are ahead of market trends.
“If you are too early with your innovation, then you have to depend on your staying power in the market. That’s why a lot of companies, even the previous [EOY] winners, have a bread-and-butter business that supports the innovation segment… Then there is some element of space. And if you can wait, then success will come,” he says.
Along with patience, entrepreneurs must also be “highly connected” to industrial developments such that they take calculated risks instead of suicidal ventures, he says. “You need to take risks such that if you don’t succeed, you can always try again. You may lose a few fingers, or an arm, but you won’t die.
“A person who doesn’t take some risk is not being entrepreneurial. Maybe you can say he’s ‘lucky-preneurial’. But luck will not last forever.” Recognising this is especially important amid the constant entry of newer, sexier technologies into Singapore, he adds.
“The market here is too small. It’s better to disrupt than to be disrupted.”
