This is why Large Corporations need to INNOVATE or DIE
In the recent months, two significant technological driven disruptive events have happened that could bring about the downfall of two of Singapore’s largest corporations. Singtel, or Singapore Telecoms, is the first and biggest Telco (they own all the infrastructure) and Comfort one of the largest taxi operators in this island nation.
SingTel’s Chua Sock Koong. Photo: Bloomberg
Singtel chief executive Chua Sock Koong, at the Mobile World Congress event in Barcelona, has called on regulators to give Telcos like Optus the right to charge or the use of Apps like WhatsApp and Skype on their networks. [Source]
Not only has this got the majority of their customers fuming mad (customers already pay for bandwidth), the company had to do release a statement to clarify that despite what the CEO said they were not going to do it. [Source]
Unfortunately, the damage has already been done, particularly when you look at it from the point of view that WhatsApp leverage on SingTel’s network for “free”, and through this, Facebook bought them for USD $19 Billion.
Image Source: TechInAsia
More recently, the GrabTaxi App is going to do the same thing that WhatsApp did but to the taxi operators here in Singapore.
For too long, Comfort has relied on its market dominance and has stagnated in improving its services. The usefulness of its electronic terminals (developed in the early 2000s by ST Electronics and running Windows CE) for bookings is probably at an end.
The arrival of GrabTaxi has quickly shown how outdated parts of Comfort’s business model are. Seldom have I seen a market so quickly disrupted. To survive and thrive, Comfort needs to refocus on its core business, that of leasing cabs to drivers.
It needs to compete on offering better rental rates to drivers, and on providing cabs that are more reliable than other operators’. This means, among other things, a reversal of its policy of hollowing out its maintenance crew, which has seen an inexorable replacement of experienced local mechanics with cheaper foreign labour, and which many drivers have complained about.
It’s not about just focusing on their core business, but it’s also about listening and understanding the needs of their customers. GrabTaxi is shifting the power dynamics from the Taxi operators back to the Taxi drivers (who just want their fares quick) and most importantly to the customers (who just want to get to their destination as soon as possible).
This is two great reasons why companies, particularly those invested in infrastructure and systems, need to take a customer-centric approach to running their business and innovation. Both Singtel and Comfort need to move away from the thinking that they are infrastructure providers or owners to providing customer experiences.
For Singtel, it is all about ensuring people can stay in touch in the most efficient and low-cost manner. For Comfort is about getting people to their destinations above all else.
In both cases, the companies were so preoccupied with running their organization and business they have forgotten their real value to their customers.
The amazing thing was that these technologies like WhatsApp or Skype (and even to a certain extent GrabTaxi) have been around for ages. Had they listen to their customers (in all cases people were already yelling at them) they would have been sensitive to it and with all their resources could have easily developed their own competing product.
So Innovate or Die, or in this case, they better buy these companies that make these Apps as soon as possible.