Corporate Watch

Changes by man to survive and improve himself and his environment are recorded in history as Civilization. In the 4.54 ± 0.05 billion years of the earth’s estimated existence, spontaneous changes in nature and intervening changes by the biblical “all creatures big and small” developed interdependencies that bonded groups and communities with similar ways and common concerns. In their “ecosystems” or close environment, all co-evolve in competition and collaboration on available resources, and the joint adaptation to external disruptions.
James Moore in his Harvard Business Review article “Predators and Prey: A New Ecology of Competition” (Publication May 1, 1993) compares companies operating in the increasingly interconnected world of commerce to a community of organisms adapting and evolving to survive, calling this a “business ecosystem” with its operators and publics. Moore, who was a Senior Fellow at Harvard Law School’s Berkman Center for Internet & Society, talks about the awesome changes that the new technologies have wrought on the business ecosystem.
“We need new solutions to the current and emerging challenges confronting businesses and society. As the great scientist Albert Einstein once said, ‘Insanity is doing the same thing over and over again, and expecting different results.’ The ability to innovate, is thus a must,” Ma. Victoria Españo, President of the Financial Executives Institute of the Philippines (FINEX) said. Thus the theme of the 2018 FINEX Annual Conference and celebration of FINEX’s 50th founding anniversary held last Friday October 12 was “Future-proofing though Innovation.”
H.E. Kok Li Peng, Ambassador, Embassy of the Republic of Singapore in the Philippines, delivered the keynote address at the FINEX conference. She was the best first speaker for the occasion under the theme of innovative technology, for Singapore is probably the best business (and political) case for success and recognition above and beyond the initial barriers to even mere survival. Singapore is an island-state of 722.5 km2, just a little bigger than congested Metro Manila with its 619.57 km2 and its 20,785/km2 density. Singapore has 5.6 million residents, 39% of whom are foreign nationals, including permanent residents. It is the first third-world economy to become first-world in barely two decades since its independence in 1965.
The Singaporean economy is known as one of the freest, most innovative, most competitive, most dynamic and most business-friendly, according to most economic measurements. By the Corruption Perceptions Index, Singapore is consistently perceived as one of the least corrupt countries in the world up to now, along with New Zealand and the Scandinavian countries. The Singaporean Ambassador humbly avoided claiming all those accolades, but concentrated on the unfailing Singaporean zest for excellence and the government-encouraged innovative mode in all endeavors, personal and socioeconomic.
Perhaps both the conscious and the subliminal image of Singapore as a successful business model energized by creativeness, invention and innovation has guided the businesses of the world, in the fast-moving era of technology and communication. Can we really “fool-proof” the future with relentless innovation and invention, as the FINEX conference dared to ask?
Of the biggest conglomerates in the Philippines, Ayala and the Aboitiz groups bared their strategic plans, both based on the dynamics of innovative technologies to drive faster to objective corporate destinations. Both divulged the creation of independent “Chief Innovation Officers” directly reporting to the Chief Executive Officer (CEO) or the Chief Operating Officer (COO) but in most cases under administrative lines to the Chief Finance Officer (CFO) or the head of Corporate Planning. Vincent Tobias, Head of Innovation, Ayala Corporation, and Jojo Guingao, Chief Digital Officer, Aboitiz Equity Ventures both endeavored to prove Mansfield and Felder’s Chair, Josiah Go’s most basic guideline: the question to start innovation is, “Why not?”
Jikyeong Kang, PhD, President and Dean, Asian Institute of Management (A.I.M.), and Bro. Armin Luistro, President, De La Salle University Philippines (DLSU), both said that Academe has responded to the urgency of the awareness and solutions for the rapid changes in business ecosystems, and A.I.M. and DLSU have set up courses and programs in Innovation as a main business strategy studied in theory and later application in the real workplace.
Workings of the new technologies were discussed by Ramon Jocson, Executive VP and Head of Enterprise Services, Bank of the Philippine Islands, who spoke on the leaps and bounds of electronic banking; Boris Tanyu Van, Lead of McKinsey Digital and Analytics, Philippines and Stephanie Sy, founder and CEO, Data Thinking Machines Data Science (a Forbes Asia under-30 awardee for Enterprise Technology) discussed developments in fintech (new technologies for finance) and artificial intelligence (AI and/or robotics).
But can the CEOs/COOs in businesses really understand and appreciate all the new and overwhelming mumbo-jumbo of the new technologies? Will they readily accept and allow the innovations proposed by their so-called “Innovation Officers” and make these part of their business strategies? How will the Chief Financial Officers (CFOs) do cost-benefit analysis on expensive technologies and untested innovations? These were questions from the floor and in the minds of the audience at the FINEX forum on “Future-proofing through Innovation.”
Imam Hussein, Director of Business Development for Emerging Markets Digital Transformation, APAC, Microsoft keynoted the concluding session with a clear message that there is no other way but to innovate in business. Change or be changed. Donald Lim, Country CEO of Dentsu Aegis Network, Philippines recommends social media advertising, which is fast-eating into company budgets for 6-second TV commercials (declined from the 30-second commercials before) and other main media ads. Kenneth Lingan, Country Head of Google Philippines observes that the advertising spend of many companies on internet presence is now about 20% of the advertising budget, compared to the 2% of before (the last decade).
Margot Torres, Managing Director of McDonald’s Philippines, admits to following the “70-20-10” marketing strategy of Coca-Cola, which many businesses have adopted as their effective guiding rule: 70% of electronic marketing budget should go to “story-telling” about the product (no hard-sell) in the internet; the next 20% to innovating from what worked in the 70% — measurement of reach (which can more easily be done in the internet) and the next 10% will be for contingencies. What the heck, the cost of advertising in social media is negligible compared to huge amounts to be spent in mainstream media, with greater and surer reach. Way to go, agrees Rizalina Mantaring, Chairperson of Sun Life Philippines, who has used social media for their business strategy of “story-telling” about life and needs, with little or no direct mention of Sun Life products and services.
There is no fool-proof way of securing the future for businesses, the theorists and academics might say. But the practitioners firmly believe that businesses must be up to date with changes and sensitivities in the business ecosystem, as more readily communicated in the new technologies. More than the awareness, there must be the proactive innovations in product and strategies, to get there ahead of the others: Be different and better.
Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.