Imagination, creativity and innovation

2010 is earmarked to be Malaysia's Innovation and Creativity Year. Not a surprise given the number of times the word "Innovation" was mentioned in the 2010 Budget. The challenge for us is how do we get things into motion and transform ourselves into a creative and innovative society?

Before we rush to the science labs and start cracking our heads, we need to appreciate that innovation is not just about scientific discovery. In their book Imagination First, authors Liu and Noppe-Brandon argue that imagination, creativity and innovation are interrelated.

According to them, imagination is the capacity to conceive of what is not, creativity is doing something with the initial conception and innovation is when creativity advanced the form.

Therefore, innovation could be applied to many areas such as business process, business models, new products or services and anything that makes our life or business better.

If imagination is the driver of innovation, it is time for us to reflect how this is encouraged in our society, perhaps in our own homes when we nurture and educate our own children before they even start schooling. Are they allowed to think and imagine constructively?

Do we welcome their questions on what we think is right and given; and engage them in meaningful dialogues or we simply shut them off because we, the elders, know everything and they should take our words as the only truth?

This reflection should also cover our schooling system as well as how young and bright Malaysians are groomed to be future leaders at our institutions of higher learning.

We may also want to ponder why the leadership of our universities need to be involved in student elections? Don't they have more critical issues to resolve and leave the students to imagine and sort things out for themselves?

If our students at that level could not be allowed to freely decide on how to solve their problems, how different would they be once they join the workforce and the real world?

For the corporate sector, innovation could be derailed by two attitudes. First is "We Know Everything" where the leadership or those who are in the position to make the difference feel they have enough brainpower to dissect the market and bring out solutions to all problems.

Such an attitude would certainly discourage alternative futures to be articulated, especially by those at lower levels.

The "Not Invented Here" syndrome is where only in-house innovative ideas are welcome. Such thinking is totally opposite to the present practice where any bright and smart ideas are even sought outside of the corporate borders.

Efforts such as InnoCentive which acts as the platform to match ideas from all over the world with corporations which see value in them has created huge value to the world.

This was initially started by Proctor and Gamble which had thousands of scientists under their payroll but was still hungry for ideas and new thinking. They understood then that there are more smart people out there than those who were under their payroll.

We have a number of initiatives which support collaboration among Malaysians to nurture bright ideas into winning global products and services. An example of this is the InnoXChange project by the Malaysian Industry-Government Group for High Technology (MIGHT).

It provides the platform for inventors to make their ideas visible and create a community of experts and other stakeholders who are interested to bring those ideas forward.

It would be great if this ready platform is used by budding entrepreneurs as well as research institutions and commercial organisations to invigorate the innovation landscape in Malaysia. As innovation is about brainpower and people, clusters which represent special interest groups should be encouraged.

Other institutions which are involved in innovation and entrepreneurship should use this as the platform to value-add to the community that they serve.

One issue that needs validation here is our innovation sphere. Are we only interested to nurture ideas from Malaysia for Malaysians or we are willing to nurture ideas from outside our country, provided Malaysia benefits in one way or another.

If we really want to move up the value chain, the thinking behind how we create and nurture value needs to be challenged. We need to be innovative in this area as well.

Land and natural resources would continue to be important in creating wealth. However, brainpower is now the real driver of value creation. As the saying goes, our key assets have legs and they can decide not to return once they leave the doors of organisations.

While we have beliefs and understandings from the past, those may not appeal to intelligent brains that have to face different issues and challenges at present and in the future.

If they are not treated in ways which are relevant to them, these talents will just walk away. We may still have the land and natural resources but without the brains, the value to the society will not be optimised.

Perhaps innovation could be very liberating to those who apply it in their lives. Innovation could be very scary for some of us who wish the world to stand still and let the happier days continue. It is time for these people to imagine, create and innovate themselves!

This article was also published at the Edge Malaysia website here:

http://www.theedgemalaysia.com/commentary/159351-imagination-creativity-and-innovation.html

Golf games to promote WCOA 2010

The Malaysian Institute of Accountants invited key stakeholders from the public sector who would be critical in the organisation of the World Congress of Accountants 2010 this November to a game of golf at Impian Golf and Country Club last Saturday. Dubbed the MIA-WCOA Challenge Series, the game was to create awareness among the key stakeholders and to reinforce their commitment is supporting MIA to ensure the world event would be a great success.

Among the guests were Tan Sri Amrin Buang, the Auditor-General, Dato Mohamad Salleh Mahmud, the Accountant-General, Dato Noharuddin Nordin, the CEO of Matrade and Datuk Abdul Samad Alias, the Chairman of Bank Pembangunan.

Playing host were the MIA President, Abdul Rahim Hamid and his Vice-President, Christina Foo. Everybody had a great time and enjoyed their game and went back with goodies from MIA.

Oil, gas and Petronas

For those who thought the issue about Petronas leadership will be put at rest with the announcement of Datuk Shamsul Azhar Abbas as it's new President and CEO, they may find that such case is not true.

In the absence of more details regarding his terms, there is now concern about whether or not he is just and interim President, to fill the gap until somebody younger with longer service tenure to surface. The Malaysian Insider, quoting a report from Reuters, raises a point that at 57, Datuk Shamsul may not serve similar tenure as what Tan Sri Hassan Merican, the former President and CEO, did. Will there be another leadership change?

The larger concern is whether Petronas could maintain its excellent track record and performance and minimising political interference which could sidetrack it form continuing to be a world class company. The incident where the board of Petronas rejected the nominee from the Prime Minister not that long ago would be a dot which will be considered in assessing the future of Petronas.

At the same time, the report about Malaysia having problem in supplying gas to new companies which plan to come to Malaysia is another issue that could derail our plan to move up the value chain. Is this the impact of maintaining a highly subsidised gas regime where there is no motivation for users to be efficient or it is simply a problem of planning? Could it also be the outcome of forward selling our gas in raising funds to finance our spending in the past? Whatever the real reasons are, Petronas will be involved and could be holding the key to the solutions.

Petronas has certainly demonstrated itself as a respected global company. As the global business environment shifts further, it would have to compete in a more challenging circumstances where competency and business acumen would determine its success or failure.

The last thing that we want as Malaysians is for Petronas to be influenced in such a way that it would have to accede to political interests more that its business interest and the interest of you and me as Malaysians, the real owner of Petronas.

Rethinking purpose and performance

THERE was certainly a lot of rethinking done on fundamental concepts at the World Economic Forum annual meeting in Davos last week. Themed "Improve the State of the World: Rethink, Redesign, Rebuild", the annual pilgrimage of world leaders, corporate captains, community leaders and other global movers and shakers took the opportunity on the world recovering from one of the most severe economic and financial catastrophes to shape a better tomorrow.

Not even capitalism was spared from being scrutinised, although the conclusion seems to be pointing not towards making any fundamental changes to the philosophy but more towards how capitalism should be applied to benefit the global society at large.

The key messages from the conversations at the annual meeting were pointed towards aligning purposes of organisations in the interest of society whilst at the same time not denying the rights of investors to create and receive value from their investments.

Despite the aggressive theme, the outcome could be viewed as basic.

It is a generally-accepted proposition that businesses are allowed to operate out of the licence provided by the society. Therefore, the behaviours of business and the outcome of their ventures should be aligned with the society's interest. Perhaps such simple principles have been forgotten by many industrialists, entrepreneurs and corporate captains in the pursuit of "success" — however, it was defined by these very people. The last global financial and economic crisis is a clear example.

In the session on Business Leadership for the 21st Century, Rosabeth Kanter from Harvard Business School shared her observations from research over five years on companies that had outperformed their peers during the crisis.

She articulated that these companies define their corporate purpose from the perspective of how they could serve the society, following which they developed business models from the defined purpose.

Agreeing with Kanter, Indra Nooyi — chairman and CEO of PepsiCo — provided insights on how her company integrated purpose into performance and stating that performance could only be delivered by ensuring the purpose is delivered at the same time.

By hardwiring incentive systems to purpose and performance, people in the company would work towards objectives which serve both the enterprise and society.

Other attributes of companies which have a fair level of sustainability, according to Kanter, were that they are involved in innovation, operate in sync with other stakeholders in the ecosystem and attract the best people.

According to Google CEO Eric Schmidt, innovation — apart from providing enterprises with competitive edge — serves the society as it transforms the world into a better place through the use of technology. Innovation also drives change and empowers people to shape their life.

This is also how real growth is generated: by bringing solutions to problems. People in companies need to be encouraged to look further than the needs of the enterprises to get the inspiration for innovation.

Engaging others in the ecosystem — such as community organisations and other stakeholders — would enable enterprises to have access to other competencies as well as developing understanding the real needs of the ecosystem. In fact, enterprises do not only create jobs on their own but through their network partners and supply chain, argues Kanter.

People are core to business sustainability, and the best people prefer to be more engaged and want to add value and contribute to problem solving. Competitive companies expect their people to be good at their jobs, while at the same time are excited and involved in issues of the communities around them.

Wang Jianzhou, chairman and CEO of China Mobile Communications, challenges the practice of analysts who focus on the short term and act on rumours. According to Jianzhou, management should focus on creating long term value and act based on realities on the ground rather than theoretical models.

In essence, the captains of industry who participated in the discussion agreed that enterprises need to align their purposes with interests of the society and develop business models on that premise. Off course, boards and management would continue to be challenged on short term performance.

This is where clarity in purpose and leadership would come into play. Boards and management should be able to demonstrate that the long term sustainability of business also means reasonable returns to shareholders in the immediate terms. The challenge is, of course, to balance between now and tomorrow, which is a dilemma in other aspects of life as well.

There is a similar discussion in Malaysia on how to ensure the corporate sector acts and behaves with high integrity and adds value to the society.

Under the National Integrity Plan, corporate integrity is the accumulation of the outcome from corporate governance, ethics and corporate social responsibility.

The conversation at Davos could certainly bring some ideas which we could emulate and adapt here. Certainly the "purpose and performance" approach as practiced by PepsiCo could be a model that we need to understand further and consider.

Combined with the experience of our home-grown institutions such as Petroliam Nasional Bhd (Petronas), we could certainly re-energise the essence of humanities into our corporations and enterprises in Malaysia.

This article was also published at the Edge Malaysia website here:

http://www.theedgemalaysia.com/commentary/158844-rethinking-purpose-and-performance.html

It's iPad!

So we will see guys in Malaysia with pads! Not the kind of pad that you may think but the iPad recently released by Apple.

Malaysians may not have the opportunity to use one until perhaps June but the excitement generated through the launch certainly would continue for a long time. Some did feel disappointed though as some features like multitasking is not available.

For the strategy point of view, Apple appears to create something between a smart phone and a laptop. iPad appears to be focusing on specific functions which many laptop users spend most of their time on like browsing the web, checking emails, keeping their photos and watching videos. By ensuring the applications that work on iPhones could also be used on iPads, iPad goes into the market with hundreds of thousands of ready applications. This makes the new product more interesting in addition to the technical features which I find very interesting. At the same time it reduces cost to Apple in terms of R&D since the results could be used in both iPhone and iPad.

iPad is another example how diffuse it is now between which one is product and which one is services. If we take a step back, we should be able to acknowledge that products or services have their own ecosystem. Demand for cars for example depends on the network of services centres, part suppliers, accessories, fan clubs as well as critics. Similarly for iPads, the number of application developers, service centres and supporters clubs would contribute towards its success or failures, apart from the functionalities it offers.

There would be more commentaries and review on iPads especially when the first iPad hits the street. But what has been revealed so far is enough to make Apple's competitors to review their strategy in anticipating tough battle ahead with iPads.