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Tap the past to innovate for the future, firms urged
FIRST-MOVER companies that are experts in their fields stand a good chance of warding off the threat of newcomers, but they must innovate and stay on top of future trends, said Howard Yu, Lego professor of management and innovation at the IMD business school in Switzerland.
Prof Yu, who is also the author of Leap: How To Thrive In A World Where Everything Can Be Copied, was speaking in the first of a four-part public interactive forum called Cutting Edge, which showcases prominent thought leaders from around the world.
Launched yesterday by the Straits Times and The Business Times, the forum will have a session every three months that ST associate editor Vikram Khanna will moderate. It is sponsored by real estate developer GuocoLand.
Sharing examples from various industries, including the finance and pharmaceutical sectors, Prof Yu underlined in yesterday’s two-hour session that companies need to understand their core businesses and market trends to come up with innovative strategies.
For example, the field of genetics was birthed by microbiology, which had its origins in organic chemistry, he said. Today, genetics is a hot topic in the quest to discover drugs that aim to cure cancer, he added.
“Pioneering companies stand a better chance of staying on top of competition,” he added.
That is because “to be a great microbiologist, you need to understand chemistry very well... to understand genetics, you have to be great in microbiology to begin with”, Prof Yu said. “What you know in the past actually bears very strong relevance to the future. So, first-mover advantage does matter.”
With the emergence of artificial intelligence (AI), however, Prof Yu said stakeholders will have to understand “what market activities and managerial decisions would remain uniquely human”.
Stakeholders have to decide on the decisions that they would “completely turn over to machines in order to make sure your (the organisation’s) competitive advantage will still be there”.
They also have to decide how they would continue to stay human inside to “protect that empathy, that social networking, that human judgment”, he added.
One example is Ant Financial, tech giant Alibaba’s financial arm, whose market valuation is “larger than Goldman Sachs”. The company was “expanding like crazy”, he said. “Every 18 months, they doubled their revenue.”
When he asked the head of human resources how it found the talent it needed, the answer was: “We never need to hire people. Our headcount remained the same because we simply automated... our mature businesses and we deploy everyone to new business development.”
That is the path AI could bring to companies, Prof Yu added.
Cheng Hsing Yao, group managing director of GuocoLand Singapore, said the Cutting Edge series aims to inspire thought on how best to embrace change and thrive in uncertainty.
Given that lifestyles are changing quickly and businesses are being disrupted, real estate developers have to respond to the evolving needs of their tenants and buyers, he said. So it is important to “continue to try and have a fresh pair of eyes to look at the way forward”, he added in his opening address.
“We hope that the conversations we start here... will give us an advantage in the way we see business and the world around us,” said The Business Times editor Wong Wei Kong.
A version of this article first appeared in the print edition of The Straits Times on Oct 6, 2018, with the headline "Tap the past to innovate for the future, firms urged".