First-movers must 'innovate and stay vigilant' to thrive in a world where everything can be copied

Professor Howard Yu presenting at the first of a four-part public interactive forum called Cutting Edge, on Oct 5, 2018.
Professor Howard Yu presenting at the first of a four-part public interactive forum called Cutting Edge, on Oct 5, 2018.ST PHOTO: YEN MENG JIIN

SINGAPORE - First-mover companies that are experts in their fields stand a good chance to ward off the threat of newcomers, but they must innovate and stay on top of future trends, said Professor 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 that showcases prominent thought leaders from around the world.

Launched on Friday (Oct 5) 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 Friday'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, Prof Yu 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 to stay on top of competition," Prof Yu said.

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," he added.

"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, however, Prof Yu said that the next leap is one that he calls the managerial creativity leap.

To make that leap, stakeholders have to understand "what market activities and managerial decision would remain uniquely human", Prof Yu said.

Stakeholders have to decide on the decisions that they would "completely turn over to machines in order to make sure (the organisation's) competitive advantage will still be there".

They also have to decide the decisions that they would "continue to place 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", said Prof Yu. "Every 18 months, they doubled their revenue."

When he asked the head of human resources how they found the talent they 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.

Mr Cheng Hsing Yao, group managing director of GuocoLand Singapore, said that 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.

"The challenge for us is... to not get encumbered by formulas that have worked for us so far," Mr Cheng said during the opening address.

One definition of "cutting-edge" is that it is something that will give one an advantage, said Mr Wong Wei Kong, editor of The Business Times.

He added: "We hope that the conversations we start here... will give us an advantage in the way we see business and the world around us."