Revolutionary empowerment Monash University presentation
SME – Entrepreneurship Global Conference, Melbourne 3-4 th July, 2008 Revolutionary Empowerment: A Re-look at Spirituality, Cultural Integrity and Development Murray Hunter SME Unit University Malaysia Perlis (UniMAP)
Some Wisdom from similar situations The Concepts
<ul><li>To equalize rural-urban affluence requires a great effort of imagination; …. Systems of ideas and values that suit relatively affluent and educated city people are unlikely to suit poor, semi-illiterate people. Poor people cannot simply acquire an outlook and habits of sophisticated city people. If the poor cannot adapt to the methods, then the methods must be adapted to the people. </li></ul><ul><li>E. F. Schumacher </li></ul>
<ul><li>Competitive advantage grows fundamentally out of value a firm is able to create for its buyers that exceeds the firm’s costs of creating it. Value is what buyers are willing to pay, and superior value stems from… providing unique benefits that more than offset a higher price. </li></ul><ul><li>Michael E. Porter </li></ul>
God does not change the conditions of a people until they change their inner shelves Qur’an 13:11
<ul><li>Opportunities are a product of our mind and these visions can become the design of our future with skilful and creative utilisation of scattered existing and forgotten resources to create great unimagined synergies. This is the true power of creativity that God has given humankind. </li></ul>
True Empowerment only comes from economic development rather than political means The Kadazan/Dusun People in Sabah, Borneo
“ I fought the law and the law won” Sunny Curtis and The Crickets 1959
Background <ul><li>2-3 million population with different ethno-cultural background </li></ul>
Background <ul><li>Predominantly rural population </li></ul>
<ul><li>Lagging along in national development </li></ul>Background
Background <ul><li>Currently unable to benefit from growing tourism industry </li></ul>
Background <ul><li>Ageing farmer population </li></ul>
Background <ul><li>Limited knowledge of potential opportunities and matching skills </li></ul>
The Major Blocks to Development <ul><li>The current “psych” of farmers </li></ul><ul><li>Growing rural unemployment </li></ul><ul><li>Unbalanced affluence (town-rural) </li></ul>The Probable Causes
Lack of Ideas Lack of education and skills Narrow mindset Feeling of powerlessness – lack of access to markets Lack of resources Lack of will
Existing Approaches Not necessarily market orientated Dependent on local ‘champions’ to convince others to follow Work on a model that may not necessarily suit Pattani, i.e., farmers in Satun younger than Pattani. <ul><li>Other Agency Programs </li></ul>
Existing Approaches <ul><ul><ul><ul><ul><li>OTOP </li></ul></ul></ul></ul></ul>Successful where participants are entrepreneurial. The channel has become too crowded to provide special attention to new communities May not be an effective medium to provide sufficient incomes to ‘novice communities’
Culture Leadership Theories in action verses Espoused Norms and group behaviour Organisational learning (single or double looped Productivity & effectiveness Stories, myths, heroes, artifacts, informal behaviours Values Beliefs Assumptions
Innovate --------------------------Avoid mistakes Think long term--------------------Live for today Save money----------------Spend for the future Work by oneself---------------Work as a group Be flexible------------- Follow rules and norms Collaborate-------------------------------Compete Make your own decisions---Make joint decisions
Opportunity is a Construct Ability to make linkages Anchoring a source of innovation Having the right Skills Networks Resources Product/Market Strategy Vision Platform Dream, ego, aspiration, greed, survival, education Experience Reference & Benchmark Cognitive, hemispherial & field Perception
Source Explanation Examples The unexpected success, failure or external occurrence Success of a revolutionary product or the application of technology from one industry to another, sudden or unnoticed demographic changes caused by wars, insurgencies, migration, etc. <ul><li>Apple computer </li></ul><ul><li>Rapid decline of Proton’s market share </li></ul>An incongruity between reality as it actually is and what it ought to be A change that is already occurring or can be made to occur within an industry. It may be visible to those inside the industry, often overlooked or taken for granted. <ul><li>Sugar free products and sugar replacements due to concern for health </li></ul><ul><li>Increasing demand for travel and holidays due to increasing incomes and leisure time </li></ul>Inadequacy of an existing technology or business process An improvement in process that makes consumers more satisfied based on an improvement or change in technology. <ul><li>Caffeine free products </li></ul><ul><li>Microwave ovens </li></ul><ul><li>Mobile phones </li></ul>Changes in industry or market structure New ways and means of undertaking business based on identified opportunities or gradual shifting of the nature of the industry. <ul><li>Health care industry </li></ul><ul><li>Education industry – private education </li></ul>Perceptual changes Changes in peoples awareness founded on new knowledge and/or values or growing affluence leading to new fashions and tastes <ul><li>Leisure and exercise industry aerobics & gyms </li></ul>Demographic changes Gradual shift of demographics in population by age, income groups or ethnic groups, etc <ul><li>Establishment of more retirement homes </li></ul>New knowledge New knowledge or application of existing theoretical knowledge into an existing industry that can create new products not previously in existence <ul><li>Video and VCD industry </li></ul><ul><li>Robotics </li></ul><ul><li>Biotechnology </li></ul>
The elements of innovation Creativity Interpersonal Interactions Hunter, Baharuddin (OUM) & Rozhan (UIA): Alpha Model of Innovation Tempera -ment Ability Skills Learning Culture Ego Strategic Thinking Innovation Focus
Creativity Lateral thinking Serial Thinking Group Education Culture Strategic Thinking Personality Hunter, Baharuddin (OUM) & Rozhan (UIA): Alpha Model of Innovation Solutions Opportunities Ideas Creativity
Attribute Small Business Entrepreneurial Business Risk Risk is to be avoided by undertaking a business activity that is already proven to be successful. Therefore business models will not be novel. Ideas and opportunities are always risks. Every village and every person is unique and will have different ideas that suit them. Need to Achieve A small business is totally orientated towards a financial return. Financial return may not be the prime motivator. Individuals and groups may want to produce something they like and have pride in. Creativity An enterprise will fit into a proven model so not much creativity is needed. The enterprise from the first idea may be driven by many types of creativity, and creativity itself may be a source of satisfaction. Flexibility A small business is a business operated through a disciplined routine in most cases. Individuals and groups may be looking for maximum flexibility in an enterprise, so it can fit in with their life, rather than they have to fit in with the small business. Change Small businesses rely on little environmental change for success. Change in the environment may suit individuals and groups as they don’t want to get locked into routine, and change prototes their creativity. Independence Financial independence is the objective. We are already independent and don’t want a business to lock us into a strict routine. Foresight A daily, weekly, monthly or seasonal cycle that is predictable. We may have to keep coming up with new things to keep the enterprise going. Initiative There are very tight resources to have much initiative. We rely on initiative to keep going, and all initiatives are considered. Control of destiny The future is controlled by sales in the marketplace. The future is in our hands of what we want to be. Commitment Total commitment. I want to be committed on my terms. Leadership I am the leader and do all tasks. Leadership is defined by tasks.
Farm What to grow? How to grow? When to grow? How much to grow? Basic agriculture Basic farm management Group management Cash Management Logistics Timing & storage management Fresh Retail Retail Management General Management Customer service Sales Produce selection Branding Vertical supply chain The Business Model Value added products Fertilizers & cosmetics New Product Development Marketing Sales
Aveda The Body Shop Thursday Plantation Sureco Hain Celestial Group Est. Sales USD120million (1996) [i] USD619mil (2006) USD1.5Billion (2006) [ii] USD85Million (2006) [iii] USD40Mil [iv] USD738Mil [v] (2006) Location USA UK Australia Malaysia USA Established 1978 1976 1976 1999 1926 Products Personal Care Personal Care Personal Care Herbs Organic food and cosmetics Basic Philosophy To sustain the environment and give back to communities Social humanitarianism activism on many issues Natural tea tree products/natural medicines Halal & Toyyibaan Free of artificial ingredients, Kosher foods Ethics Yes Green Yes Yes Yes Natural Yes Yes Yes Yes Organic Yes Yes Yes Community Yes Yes Yes Cultural Religious/Spiritual Yes Yes Mode of Distribution Direct Marketing/Salon Retail and e-Commerce Direct and through distributors Direct Marketing General distribution Owner Estée Lauder Companies Inc. Loreal Chris Dean & Family Private Ownership Listed company
Marketing C.K. Tang, Bukit Bintang Cosway Specialty shops in KL Kuah, Langkawi OTOP (Under IMT-GT) Working on MOA with them now Taman Warisan, Putra Jaya Internet Eventual Export
Issue Comments Focus Paradigm <ul><li>Requires focus on concept of food where present focus is on cultivation </li></ul><ul><li>This requires research </li></ul><ul><li>This requires entrepreneurship approach </li></ul><ul><li>Concepts not understood by farmers </li></ul>Basic Research <ul><li>Needs access to worldwide data </li></ul><ul><li>Requires availability of suitable germ-plasmas </li></ul><ul><li>Requires basic R&D to determine whether crop technically suitable </li></ul><ul><li>Requires basic R&D to determine if potential crop is economically feasible </li></ul>Crop Management & Processing <ul><li>Propagation technologies </li></ul><ul><li>How to plant, cultivate & manage to crop </li></ul><ul><li>How to harvest, extract, store and handle </li></ul><ul><li>How to process </li></ul><ul><li>How to package </li></ul><ul><li>Transportation and storage </li></ul>Marketing Infrastructure <ul><li>Require coordination of production with demand </li></ul><ul><li>Require correct channels of distribution </li></ul><ul><li>Requires a marketing strategy </li></ul>Economies and Logistics <ul><li>Requires enough volume to economically transport and distribute </li></ul><ul><li>Requires solution to inconsistencies of quality and production </li></ul>Organisation <ul><li>Need committed people with strong leadership and trust </li></ul>Government <ul><li>Need to translate support into action </li></ul><ul><li>Need funding allocations </li></ul>Finance <ul><li>Very difficult to obtain funding for these projects </li></ul>Consumers <ul><li>Need efforts for education & promotion </li></ul>
1. Recognition 2. Desirability Selected branding paradigm to highlight the project’s offering and values the group stand for in the international marketplace. (see figure branding typologies). This branding should show natural (fully natural products) Organic, Sustainable production, Community involvement, cultural and religious identity, and within an ethical business framework. Trademarks and certain Copyright Information The product technology, i.e., natural, organic, cultural and spiritual aspects should be reflected incorporated into the product. Thus the products require specific new knowledge, process and protocols to achieve these ambitions. Patents, Registered Designs, Proprietary Knowledge and branding 3. Form 4. Emotional Connection Product manifestations must reflect where and why the products exist through copy, materials and form. Copyrights and Trademarks The products should reflect the consumer ambitions for natural and organic products with a cultural and spiritual base and understand their direct contribution to the community. Brands and Trademarks
The company would act according to the following principals; 1. Commitment to Social Justice in Organic Agriculture 2. Transparency and Accountability 3. Direct and long-term trade relationships built on trust and mutual respect. 4. Equitable distribution of returns to stakeholders 5. Communication and information flow 6. Skills development and capacity building 7. Internal ethics, and 8. Professionals manning the PC, support the local community [i] . [i] Principals set out for peoples companies by Dr. Subash Mentha, Bangalore, India, as communicated to the author.
that there “is also the tendency for Asian countries, including Malaysia, to deal with the issue of values in development by Importing many technologies and systems wholesale from abroad without going through the process of mental transformation necessary to master them fully. Although Malaysia is going through rapid transformation, our growth is one without development in the context of knowledge contribution to science, engineering and technology. As long as we are consumers and operators of sophisticated techniques, plants and technologies imported wholesale from abroad, we are to a certain extent undergoing a technology-less form of industrialization. This transformation of values and attitudes is a key issue in the nation’s development agenda” [i] . [i] Asma, A., Going Glocal: Cultural Dimensions in Malaysian Management, Kuala Lumpur, Malaysian Institute of Management, 1995, P. 179.
<ul><li>Minimise Production scale to account for initial low sales/production quantities and lower capital investment </li></ul><ul><li>Mobile GMP Facility </li></ul><ul><li>Simplified Technology </li></ul>
Zakat <ul><li>One of the 5 pillars </li></ul><ul><li>Distributive justice (juristic & mandatory) </li></ul><ul><li>“ zakat revenue can be spent under tamlik mechanism for providing an opportunity or raising productivity of the poor. Viewed from the long term perspective the poor would become in time self-reliant, hense reducing the national burden of spending money on social security schemes.” </li></ul><ul><li>Khaliq Ahmad 2002 Intellectual Discourse Vol. 8, no. 2 (IIUM) </li></ul>
Element Existence Values Most spiritual doctrines and religions have very positive values towards enterprise, independence and empowerment. These have to be brought to the surface of some cultures or sub-cultures, i.e., refocusing on the functional rather than the dysfunctional aspects. Confidence Confidence is a group phenomena and can be improved through engagement of group processes to achieve new ways of seeing. Ideas The skills of ideation can be developed through access to communications technology and developing both partial and whole brain thinking. Potential Opportunities By linking ideas to markets, modes of entry, resources and skill needs, potential opportunities can be constructed. Product Focus on themes rather than marketing mixes, look for ways to incorporate consumer fears, existence, acceptance, hopes and dreams in the product (spiritual materialism) Markets Markets exist in various forms and segmentations with much more fragmentation, coupled with the ability to communicate are potentially accessible to village communities. Identify aspirations of consumers, connect products and channels to these aspirations. Technology Technology is a way of how to make and do things. Product manufacture can be undertaken in scaled down models to suit decentralization, small unit output and flexibility. The focus is on how to do things in more cost effective ways, within the existing cultural socio-organisational setting.
Competitive Advantage In many FMCG markets competitive advantage has more to do with theme, schema and branding, through selected channels of distribution, than economies of scale. The product is a fulfiller of dreams. Skills Not all the skills taught at formal educational institutions are needed to start an enterprise. In this regard its only necessary to provide people with what they need from the point of view of business, product development and production. There is a need for the “village university” to focus on showing people how to see, learn how to do and connect to consumers. Agency/Networks Through modern communications technology (internet & travel) it is now possible to contact and interact with very wide groups of people, including agencies of interest, customers, grant agencies and sourcing know-how. Logistics Logistics have advanced in recent years and can be coupled together such as the internet and EMS to create direct logistic systems between producers and consumers. Resources We have to learn to use what we have and utilize these limited resources innovatively. There are many methods of alternative funding that can be explored and set up, i.e., Zakat, unit trusts, closed equity markets, etc. Organisation New forms need to be generated from often discarded forms such as cooperatives. Cooperatives can exist at both production and market levels. People can form their own companies under umbrellas, organizations should be focused on linking the young with their older generation. Coalitions can be sort with larger organizations in developed countries for branding and market purposes. Organisations have to fit with existing social schema and develop from there, as people are ready.