In a shocking report presented yesterday, The Economist Intelligence Unit revealed that family businesses in Malaysia are LEAST CONFIDENT in Southeast Asia about their future-readiness. What exactly does the report state, and what does this mean for Malaysia?
The Economist : Malaysia LEAST CONFIDENT On Future-Readiness!
At an Economist Intelligence Unit event at the Majestic Kuala Lumpur, EIU’s Corporate Network global editorial director, Andrew Staples, revealed some sobering statistics from their study of family business leaders from Southeast Asia :
- Malaysian family businesses report the lowest levels of confidence in the future-readiness of their people, business environment and technology.
- They are the least likely to adopt new business models, offer new products and services, and enter new markets.
- Not surprisingly, they have the least confidence in their employees’ digital proficiency or development of new skills.
- They also ranked very low in being prepared for technologies like data analytics, machine learning, automation and cloud computing.
Interestingly, the Economist Intelligence Unit’s report also pointed out that :
- Malaysian family businesses believe that government regulations are the biggest threat to their growth over the next three years.
- So they see large foreign companies and other local SMEs as their best partners for the next three years.
- They are focused on leveraging those partners to drive costs down, instead of developing new products and services or to enter new markets.
The Economist, MDEC and SAP On Malaysian Family Business Future-Readiness
Now, the Economist Intelligence Unit’s study brings up some questions :
- Do the results actually resonate with reality on-the-ground?
- Is the low readiness due to a lack of funds, lack of opportunity, or lack of understanding about the value of digital transformation?
- How can these family businesses and SMEs, in general, boost their confidence and ability to transform their businesses?
So we sat down with Andrew Staples, the EIU’s Global Editorial Director; Gopi Ganesalingam, Vice President of Enterprise Development at MDEC; and Duncan Williamson, Managing Director of SAP Malaysia, for an exclusive media briefing and Q&A session.
On the burning question of the future-readiness of Malaysian family businesses and SMEs in general, the panel identified talent retention as a key issue :
“People don’t leave companies, they leave managers. You need to put time and effort into changing the company culture, and the mindset of the managers to retain talent. People start to call you when you are recognised as a great place to work. I think there is a tremendous opportunity for us in Malaysia to address the movement of talent. More people want to come back to Malaysia now, and if we can address the challenge of making Malaysia a great place to work, the threat (of losing talent) will diminish,” said Duncan Williamson.
“The work culture is changing, the ecosystem is changing. These are helping to retain talent, and bring the talent we lost back to the country. In the last two to three years, more companies are redomiciling in Malaysia, than there are companies leaving Malaysia; and there are good talent coming back to Malaysia. It’s a good change, and it’s very positive right now,:” said Gopi Ganasalingam.
They also have some advice for businesses in Malaysia :
“Business leaders need to focus on the outcomes. The organisations that are successful are the ones that clearly define the outcomes, and hold their management team accountable for those outcomes. You can then build the technology you need to deliver those outcomes, but you have to be clear on the outcomes to start with,” advised Duncan Williamson.
“The gig economy will be a major change in the way we work, particularly for the younger generation. At MDEC, we already run a programme call eRezeki to educate Malaysians about the earning a living through the gig economy. Co-working spaces are also changing the way we work, and set-up our businesses. They will also change the way our talents are being trained, Gopi Ganasalingam pointed out.
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