Your SlideShare is downloading. ×
The Secret to Business Resilience: Be Like the Bamboo, Not the Oak
Upcoming SlideShare
Loading in...5

Thanks for flagging this SlideShare!

Oops! An error has occurred.

Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

The Secret to Business Resilience: Be Like the Bamboo, Not the Oak


Published on

Published in: Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

No notes for slide


  • 1. SMUPublication: TODAY, p 26Date: 8 April 2013Headline: Be like the bamboo, not the oakBe like the bamboo, not the oakCOMMENTARY BYKEE KOONBOON singapore is Loo small andits talentpool is too small toproduce a world-class man-ufacturing giant of the Fortune 500class," Singapores founding PrimeMinister Lee Kuan Yew once said. Acryptic remark, indeed,becauseitdocsnot imply that he thinks Singaporecannot produce knowledge-basedgi-ants, ot·1·esilicmt"bambooinnovators".Why bamboo innovators? Bam-boosbend,notbr~ak, even in the mostterrifying stormordevastatingearth-quakethat wouldsnapthe mightyoaktree.Tt~urvives, therefore it conquers.Disruptive industry t rends andblack-swan crises have become apermanentfixture in todays market-place. How wonderful it would be ifcountries,companiesand individualscanstaya·esilient amid such upheavalsand unorthodox challenges.The study of bamboo innovatorscould inspit·e companies to be pro-ducth•e innovators in ordertosurpassstall-points in their business modelsduring tumultuous periods, particu-larly for small and medium enterpris-es aspiring to scale up to become glo-balchampions.Butwhy is it that Asian companiesare predominantlyproduct manufac-turea·s in the first place? This couldironicallybe a r·esultofthe Asian val-ues ofhard work and sacrifice.ll is far easier for the Asian entre-preneur to be the middleman lakingorders fr·om a few important anchor·multinationalcorporation customerswith acce~s to t he end-customers,take capital risk investing in tangiblee Kee Koon Boon.a formtrlecturerofaccounting at theSingaporeManagementUniversity.has beenan investmentprofessionalfor thepast decade. Heisapresenter at theEmerging ValueSummit2013on April9-10.assets and work hard to produce therequired products with quality andefficiency- than to attempt to buildbusiness models thathavedirectown-ership ofthe hundreds and thousandsofend-customers.As a result, these ent repreneursare unwilling to share the rewardswith their "undeserving" staff whotook neither risk nor sacrifice. Theytreat employees as expenses and notintangible assets, make most or all ofthedecisionsand hoardmost resourc-es and information, running the firmasa "one-man show". Eventually, theyma.v face thechallengeofbusinesscon-tinuity arising from succession woes.HEW IDEASKeyence is an example of the uncon-v<mtional Asian flrm. Founder lake-mitsu Taki:1.aki liberated the firmfrom manufactua•ingconventions andbuilta knowledge-basedenterprise inlaset· sensors for factory uulomation,serving morethan 100,000 customersin 70 countries.Despite having less than1per centglobal market share In a commodity-like product and only around 3,000employee~. Keycnce commands aUS$17-billion (S$21.1 billion) marketvalue-approximatelysimilartoSing-aporesKeppelCorp,agloballeader inoft~shore oil rig design and building.Mr Takizuki understood keenlythat Keyence cannot improve on Ja-pans legendary manufacturing effi-ciency. So, unlike its manufacturing-based competitors who leave sales t~distributors, wholesalers and agents,itdeliberatelyavoidsmakingproducts,except for manufacturing steps thatinvolve trade se<:rets kept in-house.Most of its employees are either"sales"or"research" staff. In theirdi-rectcontactwith the cu5~tomers, Key-ences in-house "sales" team picks upnew product. ideas on frequent fac-tory visits. For instance, its front·liners observed from the productionlines at instant noodle factories thatthe noodle qualityWU!; compromisedbecause lhe noodles were manufac-tured at variable thicknesses. Lasersensors that.could measure noodlesto 1/IOOthofa millimetrewere devel-oped to ensure consistency.A quarter of sales at Keyeneeis generated from such new prod-ucts every year, more than what SMachieves. Toexcel in theseareas,Key-ence had to cultivate a meritocraticculture, and it is known fm· havingsome of the highest-paid employeesin corporate Japan.Bright young people from rivalfirms are attracted to Keyencc bythe performance-based pay. The av-erage sulary t here is US$100,000.Engineers also get to do their ownresearch, rather than labouring foryearsundergrey-hairedsupervisors.THE EMPTY COREKeeping the front line or the "periph-ery resilient and innovative, and thecentre or the "core" diffused, and en·forcing mcritocrutic values atall lev-els have compounded immense valueat Keyence. lhis "cot·e-periphet·y"growthpat.tem is alsothat ofthebam-boo: Thevitality ofitsgr-owthrevolvesaround its "empty" centre.Instead orconstructing itselfinchbysolid inch,like a tree, the nutrientsand moisture that would have beenexhausted making and maintainingits empty centre can be utilised forgrowth of its periphery in the stem.From a builders viewpoint,the archi·tecture ofthebamboo presentsupow-erful configuration:Fibresofgreateststrength occur in increasing concen·tration towards the periphery.Manufacturing and project-basedcompaniesoften tout the si1.e oftheirorder book and their idea of"team" isabout having high-profiledealmnkerswho can bring in thesales orders; thejob of"everyonc else" is to execute ef-ficiently and "productively".The well-connected dealmakersmay be able t.o pull in high-dollarprojects, butbecauseofthedifficultiesin coordinating and executing large-scale complex projects, these dealscannot be repeated and the hype as-sociated with a big order book startsto fade, particularly when costover-runs and delivery delays rear theirugly heads. Bigger becomes ri~kier·.Even in manufacturing, the onlyway to perform and execute large-scale complex projects repeatedly istocreate a cultureofexcellence wherethe interests ofemotionally engagedlrontrliners matter in the innovationand value creation process.Customers arc attracted to thiscontagious performance culturerather than to the d<!almakcrs on arelationship basis, resulting in a val-uation breakthrough beyond the bil-lion-dollar murket value barrier thntmany Asian companies find difficultto bn!ak.Fortune 500! With "emptiness"in business model design, Singaporecan instead aim for its own resilient"Bamboo Innovator500" powerhou~with a US$10-trillion value.