Is your business a mayfly, a turtle or a chameleon?

IS YOUR BUSINESS A MAYFLY, A TURTLE OR A CHAMELEON?

ARTICLE | 10 SEPTEMBER, 2013 09:26 AM | BY JEREMY HAZLEHURST

So, farewell then, Nokia. Well, not quite. But the absorption of the Finnish mobile phone giant by Microsoft was a big moment in the story of its decline. It is probably a matter of time before the name is history. Apparently there was a lot of hand-wringing and soul-searching in Finland about the deal, but the writing has evidently been on the wall ever since the infamous “burning platform” email by its CEO Stephen Elop, the former Microsoft man who will now go back to his old employer, taking Nokia with him. But is it really sad or bad that Nokia has died? The tech revolution has seen many next big things come and go. Blackberry might soon vanish, and Taiwanese handset maker HTC seems to have already enjoyed its moment in the sun. MySpace is forgotten. Kodak will be soon. Creative destruction is rife elsewhere, too. Numerous high-street mainstays have been wiped out in recent years. Ditto Detroit. The world is changing quickly.

Mayfly businesses
Some hard-nosed capitalists argue that firms have a sell-by date and that we shouldn’t mourn their death. That’s just the market being the market. This argument says that businesses are like mayflies, which flourish for a short time, then die. That’s life.That would be fine, if businesses were just money-making machines and emotion were not involved. Those in family businesses do not always find it so easy to shrug and move on. If your business is a way of life and you have put blood, sweat and tears into it, then fatalism is a far trickier position.

More often than not founders and their descendants do not want their businesses to be like mayflies, but more like like those wizened old turtles that live on the Galapagos Islands, plodding about for centuries munching on grass. So if the laws of the market say that businesses are mayflies, is it possible to turn them into turtles?

Perhaps that’s the wrong question to ask. There are plenty of other businesses that manage to plod on doing the same thing for decades. Mayflies are attention-catching, but in reality turtles are common too.

Change management
If you really want longevity, however, being a turtle and doing the same thing over and over again is not enough. Few businesses find themselves in a benign environment without predators, and if they want to survive they have to adapt.

The best do. Nintendo started as a playing-card maker. Gap sold records before moving into jeans. Nokia was once good at spotting niches – it made cables, rubber boots, gas-masks and parts for nuclear power plants before eventually becoming a phone-maker.

If you want real longevity then it’s not best to be a turtle, but a chameleon. Firms with long-term ambitions have to be constantly looking for the next big thing – and to find it. They have to embed a culture of innovation and entrepreneurship that stays ahead of the competition. Losing that was what killed Nokia, not the market.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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