This article is contributed by Julia Chew, Senior Executive, Group Chief Financial Officer’s Office.
There are many theories in the world of academia that seek to explain what keeps a business competitive. In business theory, one of the more famous frameworks might be the Porter five forces analysis coined by Michael E. Porter of Harvard Business School in 1979. Porter's five forces include - three forces from 'horizontal' competition: the threat of substitute products or services, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers.
In more recent times, new views have emerged that fighting external battles are no longer enough to keep a company competitive. Given enough time and money, it is believed that competitors can duplicate almost everything that got us to where we are. For example, competitors can easily reproduce products, hire the best people and reverse engineer another’s processes.
Bain & Company tried to study the traits of a high performing culture. It found through a survey among executives at companies identified as high performing, 54 percent said ‘culture’ was one of their strongest attributes, second only to ‘vision and priorities’”. A strong culture is defined as the emotional path by which a company’s vision and priorities spread from top to bottom. In the article, Culture as Competitive Advantage by Paul Meehan, Orit Gadiesh and Shintoaro Hori, in business journal, Leader to Leader, a high-performance culture is described as a fingerprint— ‘one thing about a business that rivals cannot copy’.
Building People as a Strategic part of the Business
CapitaLand’s culture is shaped by the following six core values:
- Our people are our strength. We build people to build for people.
- We are committed to the highest standards of integrity.
- We have the courage to do what is right and the will to succeed.
- We add value to what we do through innovation and continuous improvement.
- We are fair and reasonable in all our actions and dealings with business partners, customers and colleagues.
- We contribute to the well-being of the community.
The significance of values is that they are universal, and unite the 12,000 staff working and interacting in different geographies and cultures. CapitaLand is a people intensive business not only by virtue of headcount, in terms of staff that operate the serviced residences, shopping malls and offices, but we elevate the standards of living in society by improving the environment around us. In the emerging cities of China, the malls we build enhance the people by virtue that we create new places for weekend community gathering. For business travelers, we provide people with comfortable homes and facilities for those away from their homes and families. Hence, it is a natural choice to make people a focus of the business and in the way we do things. Not only do we have happy staff but also happier customers which in turn create an intangible advantage over our competitors. As staff, the society and community building nature of CapitaLand’s real estate products are worth being proud of.
Building Reputations: A look at other core values
The five other core values follow from the core value of building people. On a closer read, these are values that CapitaLand staff needs to be ambassadors to in order to embody the real essence of the first core value. In other words, we cannot really say that people are our strength if CapitaLand does not practice the other five values.
Take for example integrity. We live in a world that is facing a crisis of integrity. It is not uncommon to hear of high profile corporate executives in Singapore and abroad embroiled in scandals that fundamentally are a result of dishonest acts. The consequences could be relatively ‘minor’, like fines (which in certain cases are enough to bring down a company), or large, where a reputation is soiled for a long time. I think lost reputation is a far more severe consequence because it is easier to recoup monetary losses. Most of the time, monetary losses are accompanied by reputational losses. So while people could build a company, people could cause the company to fail as well.
Built to Last
Finally I would like to introduce a perspective into the value of continuous improvement. In the highly acclaimed business literature, “Built to Last”, in which he co-authored with Jerry Porras, Jim Collins explores traits of companies that have endured the ever-changing business environment. One of Collins’s key propositions is that good is never enough for visionary companies. Such companies install mechanisms to abolish any kind of complacency – simulating change and improvement before the external world demands it. He makes use of a simple parable about a karate student and his master to demonstrate what it means to continually seek improvement.
The story begins with a karate student finally reaching a pinnacle of achievement in the discipline. His master says, “Before granting you the belt, you must pass one more test,” says the master. “I am ready,” says the student, expecting one final round of sparring.
“You must answer this question: What is the true meaning of the black belt?”
“The end of my journey,” says the student. “It is a well-deserved reward for all my hard work.”
The master does not look satisfied and waits for more. Finally he says, “You are not ready for the black belt. Return in one year”.
A year later, the student kneels again in front of the master.
“What is the true meaning of the black belt?” asks the master.
“A symbol of the highest achievement in our art,” says the student.
Again, the master says nothing for a long time. Clearly, he is not satisfied with the answer. Finally he says” You are still not ready for the black belt. Return in one year.”
A year later, the student kneels once again in front of the master. Again the master asks, “What is the true meaning of the black belt?”
“The black represents the beginning of a never-ending journey of discipline, work and the pursuit of an ever-higher standard,” says the student.
“Yes. You are now ready to receive the black belt and begin your work.”
Therefore, the core value on innovation and continuous improvement is not only about a slew of initiatives on ICE (Innovation, Creativity and Entrepreneurship) – projects that entail one to take time away from work and think of ideas that potentially could be implemented in the company. It is about constantly challenging our personal bests in the way we approach our work and our lives. We have taken many strides towards success in the past 13 years since CapitaLand was born; we have created many firsts in the real estate industry; but in the spirit of our core values, we do not rest on our laurels and continue to strive to bring the company to greater heights.
This new column entitled contributing articles to CapitaLand Inside Different Geographies.
CapitaDNA entails our 6 Core Values. These values and guiding principles represent how CapitaLand does business, how it treats its stakeholders and how the staff interacts in the workplace. As the Group continues to grow, this DNA is crucial in differentiating itself from the rest.
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