MACHINE HEAD
Derrick Yap embraced the grind of his family business, and the company making ball bearings now leads the way in fancy tech and robots.
Derrick Yap never imagined that he would join the family business and, once he did, couldn’t have envisioned how a company making ball bearings could evolve into one leading the way in fancy tech and robots. But none of these were happy accidents. Yap embraced the grind and fought for the change we’re about to see in the world.
INDUSTRY 4.0. MOTION CONTROL SYSTEMS. ROBOTS BUILT TO WORK ALONGSIDE HUMANS. PRECISION MODULAR ASSEMBLIES.
These are all exciting technologies and terms that are changing the way the world literally works, and yet South-east Asia’s premier enabler of these buzzwords is headquartered in a spectacularly dull 60,000 sq ft building in Yishun Industrial Park that is as unmemorable as its industrial neighbours. It sure didn’t look like a place where Jetsonsstyle dreams incubated.
But PBA Group’s Derrick Yap isn’t fussed. He’s too excited about the facility the group will move into next year. “It’s going to be in a really, really cool setting,” the CEO enthuses. “We want it to be a place where our staff can work and play, as well as house all the startups and companies we have invested in. Think of it as a Sim Lim Centre for robotics.”
At 280,000 sq ft, PBA’s new headquarters in Cleantech Park will be four times as large, and Yap is making sure everyone has a say in the type of facilities it will hold. Things in the works so far include accommodation, a hydroponics farm, yoga areas and plenty of room for work and testing. “We’re also going to have a coffee barista robot and maybe a robot that will make bak chor mee.” All of this will be housed in a building that the whole team agreed should look “like Blade Runner meets cyber punk.” Now, that’s more like it.
But it isn’t his fault the company’s current research and development hub isn’t a Googleesque wonderland. PBA today stands for
“Platform for Bots and Automation” but if it weren’t for Yap’s gradual but radical pivoting of the company’s business, PBA would still be focused on “Precision Bearings and Automation” or, to dive back to its origins, “Precision Bearings and Accessories”.
It was Yap’s father Tony who started PBA 30 years ago, as a business that dealt primarily with the distribution of ball bearings. Presently, PBA takes care of 30 companies in 10 countries, and has grown its workforce from 50 to 500.
TOUGH LOVE
Yap didn’t have explicit plans to join the family business, especially since his school holidays were spent helping out with menial tasks like packing. During the short break he had between finishing junior college and entering National Service, his father shipped him off to one of their factories in a rural part of Hokkaido to learn the ropes of steel manufacturing. “He didn’t even pay me in cash,” Yap recalls. “I was given food stamps and there was only one department store I could use them at to get groceries.”
Remarkably, the experience didn’t put him off. “I don’t think he sent me to Hokkaido as a way to get me involved in the business,” he says. “We were from a very poor family so my parents were always strict about money. They didn’t want my brother and I to grow up spoiled.” While a student at National University of Singapore, Yap wanted to experience independence like his brother, who was studying overseas. “My father gave me one of his condominiums to stay in, then cut me off. I had to find renters and drive boats on weekends to make money.”
Even when Yap agreed to give the family business a go after graduating with a degree in business administration, his father continued to put him through his paces, starting him in a sales position and no accounts. Five years in, when Yap was experienced enough to suggest ways to improve things, his father sent him to the Kuala Lumpur office as a testing ground. “It was located above a dim sum restaurant, had no more than six employees and I only had a shoestring budget to work with. In fact, within the first month, two or three people left because they had no confidence in this young punk who just came in.”
They should have, because that punk’s first quarterly review showed phenomenal growth, thanks to strategies that included hiring an accountant, streamlining processes and fixing conflicting KPIs. When he showed his father the improved profits at his first quarterly review, the feedback was simply, “Don’t get cocky.”
For Tony Yap, stacking the odds astronomically high against his son has proven effective. “I was forged with fire,” Yap quips. But tough as he was to impress, the patriarch was ultimately willing to let his son try out new strategies. It’s how PBA first evolved from
distributing ball bearings to including valueadded products and services.
“We would try to understand the customer’s perspective, so we started to ask them if we could help them build the additional parts needed to fit the ball bearings into their products and thus save on their labour costs. That was the first thing we did.”
The change was gradual but the valueadded services eventually outpaced the distribution business. “After that we decided this can’t be what PBA is about because there isn’t enough branding or intellectual property (IP).” Yap then steered efforts into research and development so that PBA could make its own products based on existing know-how and market demands.
With the advent of Industry 4.0, those demands have moved PBA into the field of automation and robotics. Its aim now is to provide businesses with tech products, precision and general robotics and turnkey automation solutions that will allow them to scale up their operations. Precision robotics are used where repeatability and high accuracy are needed, such as in industrial scale manufacturing processes. General robotics covers everything else, which now include collaborative robots or “cobots”, where these machines are meant to operate in close proximity to humans. PBA is also developing Autonomous Mobile Robots ( AMRs) inhouse, used to transport goods. In the pipeline are Autonomous Forklifts for warehouses, one of the first for South-east Asia.
So those bak chor mee robots from before? Not a joke, nor a pipe dream. “Whether you order mee kia or mee pok, the movements for
preparing them are the same. The taste might differ because someone chooses to cook it for three minutes and another might cook it for five, but if we can make these movements consistent, there’s no reason why hawkers with a recipe can’t scale to 20 locations,” he explains, citing this as one of the projects PBA is currently working on.
TOUGH LOVE
No entrepreneur, even one that won the EY Entrepreneur of the Year in 2017 for Diversified Engineering, achieves success without failure. Yap remembers how his father would even wish it upon him. “He was probably being philosophical,” Yap muses. But with that vague piece of wisdom and countless failures that included the closure of their Netherlands office after six months (“I was advised against it but I insisted we try. He was right. We lost money. It was horrible.”), Yap learned the true value of setbacks.
“I really don’t care if they fail,” he says of his leadership approach with his employees. “If I instil a fear of failure in the company, nobody would dare to do anything differently. Or if people think that we punish failure, they might keep throwing good money after bad because they will insist they haven’t failed yet, and eventually just pass this money-losing bomb on to the next person.”
What Yap wants is for people who have made a misstep to just raise their hand and admit it. “I want to encourage failing fast, so that we can make a decision on whether to continue or to stop.”
But first there’s the perennial issue of finding the right people. That’s where PBA’s Robotics Automation Centre of Excellence (Race) comes in. Launched in 2016 as a Corporate Social Responsibility (CSR) effort, it aimed to retool engineers with robotics skills and other new technologies, and increase the talent pool for the entire robotics and automation ecosystem. “We saw this disparity and decided that we could help train these engineers and retool them with current technology.”
The non-profit training centre was designed to be a separate entity that would benefit the industry as a whole, so Yap says PBA won’t even get first pick of the trainees who graduate. “We may have to compete with other unicorns to attract engineers so one way we can do that is by differentiation: We give our engineers a lot of autonomy. We let them work on projects on their own timeline and they have ownership over these projects. The look, feel and even names of these robots are dictated by them, not management.”
These are significant accomplishments at any age, but the 40-year-old, who looks every bit like a Silicon Valley 30-something with his spiky hair, T-shirt, jeans and sneakers (which we had to coax him out of for the photoshoot) already has succession on his to-do list.
And he, also a father of three, doesn’t even need a Yap to succeed him.
“Why do we have to assume that only a Yap would be best suited to run the company? What’s important is that the person who will guide the company in the future will be in tune with the pulse and pace of this industry. When the feedback is that I am no longer that guy, I will gladly leave.”
Succession planning was actually on his mind long before he recognised what it was. “After I left the Kuala Lumpur office, they did better, and it gave me a lot of pride. You set the foundation, train the team, and let the team take it further than you ever could. I don’t want to think that I’m so talented that the company has to have me around all the time. That’s not my motivation.”
His motivation, in his words, is to be redundant by the time he turns 50, and he is focusing on building up that foundation within the next 10 years. “It doesn’t mean I will be useless to the company at 50. I just want to force the system not to be too dependent on me. And I don’t want to wait till I’m 49 to start building that team. Having the company survive me will be my greatest glory.”
“IF PEOPLE THINK THAT WE PUNISH FAILURE, THEY MIGHT KEEP THROWING GOOD MONEY AFTER BAD BECAUSE THEY WILL INSIST THEY HAVEN’T FAILED YET.”