In an interview in The Business Times, 21 December 2015, SBF Chief Ho Meng Kit said that companies in Singapore are “not so well prepared” to take advantage of Singapore’s changing economic landscape because they are not ready to roll out more innovative products and services. He said that in order for companies to transform, they need to get out of their comfort zone and seek new partnerships with people other than their usual suspects. His call is timely as economists predict head winds and while a slowdown is imminent, it does not mean that there are no silver linings to be found. This applies especially to SMEs, who are more agile and more flexible; they should take this time to re-think their business models and find new ways of adapting to the changing business climate.
Explaining “Innovation”
Innovation as explained by Stuart Silverstein in Smashing Magazine is: [1] “by its very nature entails coming up with a new approach to an old problem”. Indeed it is really not about coming up with new creations and products that will take the world by storm, it is simply about finding new ways to solve an existing problem. A good and oft-used example these days is Grab Taxi. The Grab Taxi app is no more than a means to connect taxis to their passengers in the shortest time and in the most efficient way possible. To encourage users (taxis and passengers) to utilize the platform, Grab Taxi simply found ways to incentivize both the passengers and the taxi drivers to use it through ingenious ways such as providing outright cash incentives to drivers regardless of the time they take the booking.
This helped to plug the gap and allow passengers to book a cab at all times of the day. There is no new product being launched here and the owners of Grab Taxi are not even the incumbent taxi operators. They were using existing platforms combined with ideas that were outside the norm in order to solve a problem.
Thus with the evident success of companies like Grab Taxi, Mr Ho is right to urge companies to form partnerships across industries, to think creatively about ways of ‘solving existing problems’, and to meet the challenge of identifying and developing “new products and services” for customers—be it a B2B offering or a B2C offering.
Looking Back To Look Ahead
The first step that an SME should take in this direction is to keep an open mind and do their homework on the industry. They can go ‘back to basics’ and look at their industry as a whole: is it a sunset industry? If so, how can the industry be revived, how can they make it relevant again? What potential partners can they approach to collaborate with in order to make it relevant again? To think outside the box, the SME should be open about new ideas and possible partnerships. The next step is to narrow down the list of possible partners and consider how easy is it to get access to them rather than think about costs. Sometimes, if you approach big organizations, they may surprise you with a “yes, lets talk” response. Some of the best innovations start over a cup of coffee with practically zero costs. All you need is a working email address, open source IT support, commitment, and time!
Secondly, it is important for the SME to network in order to find like-minded people looking for opportunities to expand. MICE events are a good place to start. Another place in which to network is social media. Platforms like LinkedIn and Facebook have interesting groups that can help you connect to like-minded people from other industries looking to innovate and expand their range of services. Again, the investment cost for such activities is zero to low and the yields can be interesting.
The next important step is to find out what your customers want. In management speak, this is called doing your market research. The results of this will inform you where the gaps are and how they can be plugged. If the SME’s customer base is small enough, market research could be as easy as having a chat individually with their customers to find out more about their needs. If the customer base is large, it may be worth putting aside a budget (smaller than the cots of a CEO’s car) to look for a market research company. Alternatively, SMEs who have enough internal resource can conduct simple research by creating online surveys on their own after determining the metrics that for which they want to get a pulse. A design thinking workshop can also help to kick-start the process and guide them along the way.
Conducting market research allows you to systematically map out your audience. It also allows you to narrow down quite precisely what your audience (or the industry) needs in a more systematic fashion. It can help you plan your re- entry strategy to recapture the imagination of your customers.
More importantly, SMEs should ensure that their activities and their organization’s goals are clearly articulated and defined—what is the company’s raison d’être? Profitable innovation can only come from a clearly defined strategy and the way the organisation is set up. When innovation is chosen as a goal, without transforming the organisation, it ends up as a hobby or a vanity project rather than a business foundation.
SMEs and companies should not be afraid of finding new solutions to old problems. More importantly, the idea of innovation does not come from outside. It must start from the organizational culture and the mindset of the leadership. Perhaps business owners can start with themselves, by re-evaluating internal practices and the corporate culture. This is certainly taking one small step in the direction of transforming the organization’s outlook towards searching for the silver lining ahead.
Article by Luenne Angela Choa and Jonathan Eng. Luenne is the co-founder of Hornbills Concepts and Communications, a start-up focused on effective communication, skills training, and empowerment for SMEs and their staff. Jonathan Eng is the Design Director of Oculus Design, a company which believes that SME owners need to think like designers, who in turn need to understand business practice and management. Strategic design and management for SMEs is the way forward.
[1] “Changing Perspective: A New Look At Old Problems” [http://www.smashingmagazine.com/2012/09/changing-perpective-new-look-old-problems/]3 September 2012, accessed on 22 December 2015