What Will Keep Companies Ahead in the ‘New Normal’
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Innovation would seem to be in the DNA of all technology companies. But what separates true innovators — and especially those that prosper and grow — from the rest? And what will continue to set them apart in the post-pandemic “new normal”? It will come down to two basic characteristics: a strong embrace of risk and the ability to balance forging ahead on established priorities while also adapting to change.
Let’s start with risk.
The most profound and exciting change among Asian tech companies in recent years has likely been the heightened embrace of risk. We can measure that in various ways. For example, the number of registered tech start-ups in Singapore five years ago was a mere 1,000. As of the end of 2019, the number was 4,000. VC deals in this part of the world rose from just a couple of hundred five years ago to more than 600 in 2019.
Risk has always existed, of course, and in the past, it’s been taken on by large family conglomerates and business entities that have very large balance sheets. Now, risk is being assumed by smaller companies with considerably more on the line. This embracing of risk has been dramatic and very encouraging. In Singapore, it can be seen among university graduates and even high school students.
Truly innovative, disruptive, and successful teams have an eerie level of comfort with taking risk. That said, the appetite for risk in Southeast Asia is still very low. This is not a criticism, but should be seen as an opportunity. As Southeast Asian companies and their leaders become versed in taking on risk, managing it, and mastering it, some very big business decisions will pay off.
In an increasingly crowded market, risk taking will be key to keeping an enterprise competitive. Also important will be an ability to prioritize truly mission-critical initiatives amid the constant din of distractions and aggressive stance on marketing. While it’s essential to be able to pivot when necessary — a talent never more necessary than during the pandemic — there is a tendency among many growing companies to pivot constantly. Incessant directional change is a form of corporate ADHD that can do you in.
The key to successful juggling of meeting strategic and tactical challenges lies in keeping closely in touch with consumers and team members. The companies in our portfolio that are faring the best are those that have been on top of changing customer needs brought on by the pandemic. Businesses that can be true to their strategic customers and solve those customers’ problems as they crop up are the ones that are bobbing to surface fastest.
The best management teams also have turned the chaos of the pandemic — people working from home, virtual everything, etc. — into opportunities to develop stronger ties to their own people and improve their corporate culture. One of the biggest components of leadership, in my mind, is working with your people, showing that you care and that you’re there for them. For some reason, it’s not a universal instinct, even in the challenging times we’re experiencing now.
Amid the challenges of the pandemic, the best leaders have driven deeper into their organization and implemented very thoughtful change, often at rates much greater than what took place in pre-pandemic days. The pandemic stirred leaders, many of whom had been comfortable being part of a broad leadership team, by focusing a spotlight on each team member’s activities. What we’ve seen, particularly among entrepreneurs in their 20s and 30s, is a crisis-induced call to action. It’s been scary, because not everyone in a leadership position has been able to rise to the occasion. But the crisis has served as an acid test of which entrepreneurs are able to rip up at least parts of the game plan and rewrite it on the fly. This will be an incredibly useful skill as we move into 2021.
About Alan Hellawell
Alan Hellawell is a Singapore-based venture partner at Alpha JWC Ventures. He was formerly Group Chief Strategy Officer at Sea in Hong Kong and a Managing Director at Deutsche Bank there.
This article is adapted from the November 10, 2020, teleconference “Disruptive Strategies in the New Normal.” If you would like access to this webcast or would like to speak with Alan Hellawell, or any of our more than 700,000 experts, contact us.