If there are only two words to take away from this email, they are - never settle.
As I reflect on the past and shift focus to the year ahead, there is much we can be thankful for. Since CapitaLand was set up in 2000, the company was a trailblazer in the real estate industry and a darling on the Singapore Stock Exchange. The market was always excited about what we were up to. One veteran analyst shared that the CapitaLand Story was so exciting because we were always creating new possibilities for the future. Our share price traded very well and at one point, it was trading more than 3 times the book price (in 2007). This was something virtually unheard of in the real estate industry!
But is this enough? Are we happy to maintain status quo and just continue to do more of the same, especially in an environment where we see major disruptions across all industries? This would be an easy way out. But we must remember that corporate Darwinism doesn’t discriminate. Companies either thrive, survive, or erode, especially in a world that is constantly changing. This is a time when it is dangerous to stay contented.
As part of the CapitaLand family, it feels good to see that what we have worked so hard for is bearing fruit. My question to you then, is “What’s next?”. This might seem like an irrelevant question. After all we are still one of the largest listed real estate companies in Asia today, and we continue to be the leading player in fund management, retail and serviced apartments in Asia. In fact, if we continue to stay focused on what we have been doing, we should be able to deliver returns above our cost of equity – a fundamental and most defining indicator of shareholder value - quite consistently for the next couple of years.
As your Group CEO, I do not believe that continuing with the status quo is the responsible thing to do for the company, or for you as part of the CapitaLand family. I recently spoke to one of our investors. He remarked that CapitaLand has somehow “lost its mojo” even though our returns have been improving over the last few years. Where are the new growth opportunities? Where is the new excitement? I am sure we do not want to be part of a company that is accepting of mediocrity as we cruise along. Instead, I want us to be a strong, bold company that has the extra spark to go the long haul. I want us to be on the offensive instead of simply defending the status quo.
The market has big expectations of us. And that is a good thing. This means investors know that we have done a lot and are capable to do much more. I know we are capable to do much more.
Be competitive, never settle.
I am a competitive person by nature, as I believe and hope most of us are. I also believe in putting in hard work to achieve our objectives. I want us to run an incredibly successful business and I want us to win in the things we are doing. It could be as simple as making sure that we respond faster than our competitors to retailers who want to rent a kiosk or booth space in our malls; or making sure that we build faster and better than others; or making sure we can drive better rental growth than the market. I know that the business world is full of setbacks and missed opportunities. Of course, things will get hard. Of course, you will feel frustrated, angry, defeated at times. But we must never let obstacles hold us back from achieving our goals. Continue to work hard, do well, and never settle for mediocrity.
Continue to focus on our people.
An organisation is only as good as the people we have. For those who know me and who have worked with me, I have always paid very close attention to people, teams and relationships. Even as we put our energy toward running the day-to-day business, we must always be on the lookout for talent. Groom them, empower them, engage them. Be prepared to reward them and incentivise them in a way that is properly aligned with the objective of building lasting strengths for CapitaLand.
But what happens when our best is not good enough? Being aware of our own inadequacies is the first step to measure up. But for those who consistently underperform or who do not embody the right values, we must give them direct feedback, and help them regain their enthusiasm and focus. But we cannot fish for the fisherman. We cannot do this indefinitely. At the end of the day, we do not want our company to be filled with ‘quit-but-stay’ employees. Neither do we want too many popstars in our midst. Popstars know their worth and are very likely looking for the next gig when the company takes unexpected turns. What we want are rockstars. Those who pull their weight and stick with their band no matter what.
Be a rockstar.
Drive a strong, positive and effective culture.
Having a talent pool with the right skills and experiences is only one part of the equation. I fundamentally believe that the most important driver of success is a strong corporate culture, one that is founded in passion: passion of our people across the company who do their best and find meaning in their work; passion to speak up and challenge assumptions, as long as these are in the best interests of the company. We will need to be confident and intuitive; not egotistical and emotional. We need to be always learning and insatiably curious. We need to be willing to embrace uncertainty, constantly searching for new ideas, new growth areas and new possibilities. We want a culture where our colleagues look out for each other and treat each other with respect. We must be open to the ideas of others, where the success of others does not diminish our own. This corporate culture must be the glue that binds us together, part of our DNA as we move forward.
To this end, I have set Seng Chai and the HR teams a target to make CapitaLand the Employer of Choice within the next 3 years!
Don’t just do good by your people, do better.
Over the past few years, I have come to realise why ‘never settling’ is so important to me. In an earlier email, I shared that what drives me is the opportunity to make a difference and to change people’s lives for the better. We can continue to make a difference to people’s lives only if we can run a great business that gives us the ability to do even more good for others. I have experienced this first hand many times over the years, whether it is in growing the careers of our colleagues in CapitaLand, or reaching out to less privileged communities through our CSR efforts. When we come together as one CapitaLand, we will grow as individuals, we will grow as a team, we will grow with our customers and partners, we will grow our opportunities, we will grow our business going forward. And ultimately, we will grow the impact we have on others.
Together with the core leadership team, I have spent a great deal of time these past few months reviewing our existing business strategy and speaking to many of our stakeholders – ranging from business partners, investors, the media, consultants, and our colleagues. We have emerged with a deeper appreciation of what we must do to set CapitaLand’s strategic direction in this world of new realities where the old rules no longer apply. We will search for opportunities that can add new capabilities and make us more competitive. We will make some tough choices in areas where things are not working so well and to solve difficult problems that can stand in the way. ‘Never settling’ will be uncomfortable. But if the transformation does not make you uncomfortable, it is not transformative enough. I have said this on various occasions: if we want to achieve what we never had, we must be prepared to do something we have never done!
CapitaLand has built up a strong foundation over the years, and we are definitely better placed than most to make these strategic shifts when they come. I am now filled with even stronger conviction that our people and culture will be key to helping us navigate the shifts ahead, and I will continue to prioritise these areas in 2019.
The New Year will bring its own mix of successes and challenges. It is because of your hard work, commitment and support that I have such great confidence in CapitaLand’s future. On that note, allow me to wish you much happiness and good health in 2019!