Rewarding boldness in business

World Bank economist Dr. Rong Qian said in a recent speech to the Management Association of the Philippines that one of the negative features of the Philippine economy was the lack of competition. Perhaps, she added that this was one of the reasons that this country was one of the few where high economic growth does not lead to any significant reduction in the poverty rate.

Another common observation is that Filipino businessmen lack boldness and continue to congregate in the traditional “safe” industries – real estate, financial services, public utilities, retailing and food services. Even those who talk of encouraging entrepreneurship do not go out of their way to encourage boldness in business.

Perhaps what we need in this country is the equivalent of the FT ArcelorMittal Boldness in Business Awards which award companies that “...look to generate prosperity far into the future, not make a quick buck.” Another term to describe this is “sustainability.”

Sustainable businesses are “long term” greedy which means they want to generate prosperity into the future; and, they should provide more economic externalities, not just extract economic rents which is the principal method of industries like real estate and public utilities.

According to the Financial Times, corporate social responsibility means “... companies should be responsive to employees as well as shareholders, should support civic life rather than enriching tyrants...It is also about what kind of profit motive drives a business...A sustainable business is one that makes whole commercial networks better – enriching all the participants, rather than separating the winners from the losers.”

For a business to be sustainable in the fullest possible sense requires intelligence, invention, courage and verve. In the words of FT : “What is required for real sustainability is, in a word, boldness...Bold businesspeople cling to their long term vision for their businesses, even when short term conditions are unfriendly.”

FT Boldness in Business Awards had seven categories. The seven winners were the following: Person of the Year: “Sir Tim Berners Lee; Drivers of Change: Fast Retailing; Corporate Responsibility/ environment: Iceland Foods; Entrepreneurship: Halo Top; Technology: Ocado; Developing Markets: Gro Intelligence; Smaller Company: Lillium.

The category of Developing Markets had six nominees. Gro Intelligence was founded to provide agricultural data about Africa. It has expanded to focus on global food markets. Its data help users better plan for droughts, invest in more resilient crops and make better informed choices about loans and investments.

BYJU is India’s largest educational tech company which offers app-based learning programs and test preparations to primary and secondary school pupils. In September 2018 it received a $100 million investment for a 5 percent stake which it plans to use to expand internationally.

Cargox is a Brazilian company whose platform connects companies needing to ship goods with trucks with spare capacity. Cargox expects to reach $1 B in revenue by 2021 and plans to bring its technology to a wider global market.

Tala was launched in Kenya in 2014. Its app offers microfinance loans in emerging markets, using data points from a user’s smartphone to assist lending decisions. By October 2018, the company had issued more than $500M in loans, and raised funding from PayPal to expand globally.

Transsion is a Chinese electronics company that makes smartphones aimed at sub-Saharan African consumers. It has adapted to that market by improving battery life, enabling phones to house multiple SIM cards, and recognize local languages.

Vindhya E-Infomedia is an Indian outsourcing company. Two thirds of its staff are disabled – unusual for a country where disabled people face significant discrimination. The provider of claims processing, payroll and data management has attracted clients such as IBM, Accenture and SAP, while staff turnover is in single digits.

The winner in the Entrepreneurship category was Halo Top. In 2011 its founder Justin Woolverton began experimenting in his kitchen to create an ice cream that satisfied his sweet tooth, but with substantially fewer calories than commercial brands. By the end of 2018, Halo Top had a hefty share of the North American market and was generating annual revenues of more than $300M. Halo Top has also started selling its low calorie ice cream in the UK, Australia and Singapore and continues to expand internationally.

The winner of the Person of the Year Award was Sir Tim Berners-Lee. Here is the citation of the board of judges:

“By designing the world wide web three decades ago, Sir Tim cemented himself as one of the most influential people of the modern era: his creation has had an incalculable impact on our everyday lives. But having grown increasingly concerned at how large interests were exploiting the web’s openness – including for electoral manipulation and cyber crime – the British computer scientist designed a data platform called Solid aimed at returning ownership of data to the users who own it. In 2018. Sir Tim launched Inrupt, a for-profit company intended to put Solid in operation, maximising the upsides of the web while minimising its downsides. The goal, in Sir Tim’s words is to “give people complete control of their data.”

One common factor that this bold businessmen shared was that they had the ability and the courage to disrupt their industries. The biggest disrupter in the next decade or so will be the new technological developments that are starting to accelerate. Manufacturing is the best example. Our policymakers are still focused on foreign investors to come and set up factories in this country because for the past 200 years the means of production has been the factory and the barrier to entry has been the capital to own it. But for new emerging technologies from AIs, the cloud and open data, 3D and micro-printing, the barriers to entry are dropping fast.

We are seeing a world where all kinds of innovations will become the norm – from distributed solar energy to data driven banking for the unbanked, from 3D printed ultra low cost housing to sensor micro-irrigation for drought resilient agriculture.

This is a world where boldness and innovation will be the necessary ingredients for survival for all businesses.