In an interview with Systems Catalyst, Dr Leong Mun Kew, Deputy Director NUS-ISS, shares his views on surviving the suicidal pace of change and keeping ahead of competition in today’s high-tech economy.
Q: It’s been said we are now living at the edge of change, tumbling from one technological evolution to another every time a disruptive technology succeeded in challenging yet another time-tested conventional business model. What do you make of it?
We are living in exciting times! It is now possible for anyone armed with motivation and ideas to challenge the traditional modus operandi and influence reality anywhere in the world. You can create new business and opportunities if you ask the right question at the right time.
I like to look at examples outside of the US because there are more interesting lessons to learn there. Consider Flipkart - India’s answer to Amazon.com. This online megastore was just launched in 2007 and (as the WSJ India reported) it generated revenues of US$1 billion in the year ending February 2014. What’s even more interesting is that it did that with a 40% profit margin. Flipkart was successful because it did not blindly replicate the American business model. It adapted the operation model to suit the local scene. So, in addition to the ubiquitous US model of delivery trucks and credit card payment in urban areas, Flipkart also makes delivery runs to rural areas on nifty motorbikes and takes payment in cash.
Q: How do you know what the right question is?
Let’s use Flipkart’s case again. e-Commerce in India is estimated to be a US$6.5 billion industry, of which 45% is conducted on mobile devices and 25% come from rural areas. What are the right questions to ask in this scenario? Is my online store mobile-friendly? How do I deliver to rural customers? What happens if they don’t have credit cards? Notice how I’m just asking questions? There are many possible solutions – that leaves space for competition, for innovation, for there to be many right answers. But you must first ask the right questions.
Let me give you another example. In terms of smartphone penetration globally (http://think.withgoogle.com/mobileplanet/en/), Singapore is high up there at 72%, USA at 56% and India, a dismal 17%. But if you look closer, you will see that in terms of actual number of smartphones, those percentages translate to a mere 4 million phones in Singapore, 187 million in USA and 186 million in India. So, while India may have a low penetration rate of 15% now, in terms of growth potential and current market size, it represents far greater opportunities than Singapore or the US.
Depending how you look at the data, you can derive very different conclusions in your analysis. So asking the right question, framing the issues correctly, is an important step to getting the right strategy to create your opportunities.
Q: Can technology help in framing the issues?
Yes, of course. And we are seeing growing interest in technologies like big data and analytics for decision support and issues resolution. This is especially the case for businesses relying on online marketing to drive traffic to their websites and solutions. They have to move away from decisions based on gut feel to making the right choices using real-time feedback from web analytics and what their customers are actually doing on their websites.
A more important area to focus on is disruptive technologies. Disruptive technologies are those that create a “10x” difference to the state of the art. So, today your high speed broadband has made WAN as fast as LAN and we see that with Dropbox – we use it just as we would a local hard disk on our computer, but we have it everywhere we are. We get technology in our homes today that gives us near professional-quality conveniences at home, like being able to enjoy really good coffee at home with a capsule and a touch of a button. It has become cheaper to replace your damaged electronic devices than to repair them because of global economies of scale in manufacturing. And companies are finally making technology invisible where it doesn’t matter – my mom wrote her first email on an iPad, and my cousin has got my 78-yr old aunt onto Whatsapp.
You’ve got to be aware of the coming technologies, but you mustn’t get hung up on them. They frame the issues, but they are not the question. And they’re not the answer, though they may be part of it.
Q: Does this not make the already competitive landscape even more complex? Can leaders and organisations build corporate resilience amidst such uncertainties?
The right question leaders need to ask themselves is whether the competition will ever slow down for them to catch up. It’s not going to happen. And you shouldn’t think about catching up. Think instead of leapfrogging the competition. Take a risk. There is no guarantee of success. But doing nothing is a guarantee of failure. We have seen how mashing new technologies have disrupted traditional business paradigms and brought down giants like Kodak and Borders.
Leaders need to change the mindset of the organisation from viewing change as a nuisance to embracing it as an opportunity for doing something different and something better. The old way may not be wrong or obsolete, but it’s not just about you. Somebody may be offering the same service, the same product but in a way that is different, more engaging, and more fun to your customers.
Here’s an example. The National Library Board (NLB) has digitised quite a few newspapers. Some of them were very old, and the Optical Character Recognition (OCR) didn’t do a very good job (you need to be well over 90% to be easily readable). The traditional way to fix this is to hire a bunch of people to read and correct the OCR. This is both expensive, time-consuming and doesn’t guarantee accuracy (trust me, it’s a boring job). What NLB tried instead was a collaboration with NUS School of Computing to develop a proof-of-concept, TypeAttack, which was a Facebook game which presented snippets of poor OCR text for manual correction by players. At the end of the trial, the TypeAttack corrected text were close to 100% accuracy. And all this was done for free by people playing a game for digital fame (beating other players in speed and accuracy scores). Although the game was not commercially designed, it combined social media, gaming and the Internet to crowd-source the correction service for free. More important in this case was NLB’s willingness to explore new ways of doing things with the technology available.
Q: That is clever. What are the technologies organisations should pay attention to?
We use an acronym, MOSAIC, to remind ourselves of today’s technology drivers. This stands for Mobile, Open, Social, Analytics, Internet of Things and Cloud.
We need to keep the MOSAIC technologies in mind when we strive for game-changers in our organisation. In NUS-ISS, we analyse and show how companies have created disruptive business models with MOSAIC technologies, transforming the way they approach the customer, the market, the business ecosystem, and even the competition. Through our works in e-Government and Smart Cities, we also advise government officials in the understanding of how MOSAIC technologies can lead to public service transformation, as well as to encourage greater private sector technology adoption and competency development.
Education is key to understanding and creating innovations through MOSAIC game-changers. Again, it’s not the technology, but framing the issues with those technologies and asking the right questions that will prepare companies and people for tomorrow’s needs.
This article is first published in NUS-ISS quarterly e-newsletter, Issue 7 (Jul-Sep 2014).