Speech by Mr Inderjit Singh, Deputy Chairman of the Action Community for Entrepreneurship ACE, at the Singapore Brand Conference 2010 on 25 March 2010 at 9.00 am at Pan Pacific Hotel Singapore
Distinguished guests,
Ladies and gentlemen,
Good morning.
1. I am glad to be here at the Singapore Brand Conference 2010. This is the fourth time that this conference is being held, and its theme has evolved through the years — from inculcating the principles which transform businesses into brands back in 2007, to aspiring towards borderless brands through innovation today.
SMEs must innovate
2. I had the honour to be part of the Advisory Committee for this event, made up of people who have made it their business to try to understand the factors that make for success in SMEs. One thing we felt strongly about was that our SMEs must innovate to succeed. What do we mean by innovate? It means that SMEs need to transform their business models from traditionally doing everything internally to future driven SMEs, where they collaborate with their customers and suppliers in innovating the next generation product or service through highly trained and skilled employees.
3. SMEs need to look beyond their current success to the success of tomorrow. To quote from February’s BusinessWeek, “We must not be too busy pedaling the bicycle of today’s business models that there is no capacity to explore new ones.” If companies don’t adapt and change they will not last long.
4. DPM Teo Chee Hean in his recent speech on the National Productivity and Continuing Education Council emphasized that to raise productivity, “it is no longer sufficient to focus on optimizing or reducing production costs to improve the bottom-line, we must also look at new ways of improving the top-line – looking harder at new and innovative ways if creating new products and services, and going into new markets, to capture greater value”. This is like in the past where quality was a competitive advantage but is a given today. Similarly, productivity for the cost side of the equation is today a given, and not improving productivity will mean sure failure for companies and for nations. Today productivity needs also to impact the top line, or revenue side, of the equation, not just the cost side of it. In other words, for the same resources we employ, whether manpower, cash or equipment and technology, can we sell more? This is what I believe top line productivity to be.
5. There are many way companies can do this, but one important way involves portraying the attractiveness of your products and services to the markets through a distinctive brand. Branding and innovation together can create higher value-added and if this value add makes your product or service more appealing to your customer, you would have gained much more than you invested, and through higher revenues you would have achieved higher productivity. This is a more sustainable way forward than to always focus on only cost. In other words while cheaper is good, it can no longer be enough.
Branding anchors innovation
6. Enterprises, by now, will realize that innovation alone is not enough. Even if a product or service is perceived as being innovative, this does not naturally bring about success in the marketplace. There are many instances of highly innovative products from start-up firms that fail to be adopted. Branding is essential to convey the innovation to the market to acquire customer mindshare, before they are able to cross this chasm from innovative unknown to market success. They are hence two sides of the same coin. Whether it is innovation in the idea behind your business model, the technology undergirding your products, or the excellent service you provide, they all need to be built on the foundation of your brand.
7. Some examples of impressive innovations that have not brought the expected commercial returns include Creative’s Zen, which was acknowledged by many to be technically superior to Apple’s iPod. Also the Segway, touted to be the revolutionary green answer to the future of transportation, still faces obstacles in selling the product. Sadly, there are many such examples among our SMEs as well.
8. The purpose of branding is to define your organisation’s unique idea and values in the minds of your customers so clearly, that even when you innovate to stay relevant to changing times, your brand nonetheless stays true to its identity and the promise you have given to your customer. In effect, branding frees you to innovate in the most effective way, and serves as a guiding light as you expand your portfolio of products and services, and move across geographical and cultural boundaries.
Managing precious IP assets
9. Besides continuing to innovate and build brands to differentiate themselves against their competitors, companies need to understand how vital it is to systematically create, manage and leverage such intellectual property, or IP, as value-enhancing assets of their organisation.
10. In Singapore, our SMEs have not fully explored nor exploited what good IP management can do for them because they seem to fear the cost and expense when it comes to IP investments and as such, many SMEs continue to be happy trading product and service brands owned by others and content with making middle-man margins. There are also SMEs that have created their own IP, but are not protecting or managing them in a way that safeguards their competitive advantage.
11. IP management does not mean just adding layers of protection through trademarks and patents, but also about harnessing the commercial and partnership potential to grow your business. Neither is it just for technology companies. Take for example Heatwave Shoes, which has carved a niche for itself among professional dancers and models, who swear by Heatwave’s 41/2-inch heels, buying several of the same design in different colours each time. The shoes’ special composite rubber sole is the secret to their comfort. Their first interest in IP management came about because their brand name was being used by others without permission. However, they soon realised it encompassed the management of their business practices, models, know-how and much more. With the help of a consultant, Heatwave plugged the gaps in its documentation processes, registered its trademarks, developed franchise agreements that ensured legal protection, and many other details right down to securing the copyrights of marketing materials. All these have paid off in its international ventures, as the company now has in place IP management systems that support their business strategy to build their brand overseas.
12. Another company is Muthu’s Curry, a name that is well known for its signature fish head curry. The company wanted to introduce new concepts to the business and to franchise its business overseas, but they quickly realised that they would first have to address its weak IP management. Foremost among these was registering its brand, and safeguarding its most important intellectual asset — its recipes. I’m happy to say that now Muthu’s Curry is serving its fish head curry in India, Malaysia and China.
Build capabilities
13. The government recognises the need to help companies especially SMEs to build capabilities in the area of Branding and IP Management. BrandPact, for example, is a joint initiative by IE Singapore and SPRING to help local companies meet their brand development needs. Since its launch in 2005, more than 8,000 participants have built up internal branding knowledge through training workshops, brand assessments and brand clinics. Some 250 also embarked on branding projects to put into practice plans to strengthen their brands.
14. To help companies develop capabilities to create, own, protect and commercially exploit their ideas and knowledge, SPRING and the Intellectual Property Office of Singapore (IPOS) launched the IPM for SMEs programme in 2007. Since its launch, some 2,500 participants have attended conferences and seminars to learn how to manage their intangible assets, and more than 200 IP capability development projects have been completed.
Conclusion
15. To conclude, I would like to commend Strategicom and its partners for organising this conference and initiating a survey on innovation in SMEs, and to encourage more private sector efforts to help build strategic business capabilities in our local enterprises. I am sure today’s speakers will bring you interesting insights and practical pointers that will help you in your endeavours to build truly borderless brands.
16. I wish you a fruitful session. Thank you.
