Top Glove Leaders’ Summit 2015 – Transformation for a Better Tomorrow

In last season’s English Premier League, Chelsea beat Swansea 5-0 home and 4-2 away. Chelsea has won each of their last five games against Swansea. Chelsea was the runaway League Champion with 8 points above the second-placed Manchester City.

2. In the past 23 seasons, a defending champion never lost the opening game, and drew only three times.

3. However, Chelsea drew their opening game against Swansea last Sunday (2-2). In fact, third placed Arsenal lost their opening game against 12th placed West Brom. And just the week before, Arsenal beat Chelsea, the Champions, in the Charity Shield.
What a difference one year makes! Or even one week!

4. Whether Chelsea is crowned champion again this year will depend on a lot of factors. Not just what they do, but also what others do. Or don’t do. What Chelsea can do is try their best to fix what is under their control. The same applies for Top Glove. As Tan Sri Lim mentioned last night, we can do little about the exchange rate and the likes, but there are a lot of things under our control.

Bismillahirrahmanirrahim
Assalamualaikum wa Rahmatullahi wa Barakatuh
Salam Sejahtera
dan Salam 1Malaysia

Tan Sri Lim Wee Chai, Chairman of Top Glove,

Colleagues,

Ladies and Gentlemen,
5. It gives me great pleasure to be with all of you this morning. When we last met at Top Glove Leaders’ Summit, it was at the Saujana Hotel, on a Saturday morning, on 22 June 2013. But today, we don’t have to go look for hotels to accommodate us. We have progressed. We now have the summit in our own building. Congratulations!

6. In 2013, I spoke about how proud we should be having captured 25% of the global market share. And rightly so. Today, our ambition is to grow that to 30%! Can it be done? It is not for me to answer. People in this room can answer. Not just the front row. Everyone in this room. Actually, beyond this room, our colleagues out there on the factory floor. No one of us is better than all of us.

Ladies and Gentlemen,
7. In June 2013, Brent crude was trading at USD103 per barrel. And went as high as USD115 in June 2014. The dollar was trading at RM3.25 in 2013. And Top Glove shares were RM6.24. Today, the crude is less than half of what it used to be, the Dollar has appreciated by some 20% and our shares are trading at RM7.70!

8. Back in 2013, no one could have accurately predicted these numbers. The message is, we can only plan for the future, and prepare like mad. There is no guarantee our desired future will materialise. Do we just give up planning? Of course not! We accept we can’t predict the future with great certainty. And, we also accept we can change things under our control.

9. In 2013, I touched on the diverging paths of IBM and Kodak. That’s despite both having a history of remarkable successes in their respective industries. Top Glove’s successes to date are no predictors of our future trajectory. If they are, then Kodak will still be around. So will Blockbuster Video, Woolworths, Compaq and Arthur Andersen. Or, Enron and MCI Worldcom. Corporate history is littered with many more such stories. How can we make sure Top Glove continues to not just survive, but thrive?

10. We can. By making Top Glove a learning organisation. Learning, not only from our success and failures, but also from that of others. Learning from Kodak on how not to make film rolls after smartphones came out. Learning from Apple on how not to release a product, even for a number of years, until we are satisfied with the strictest quality standards. Learning, from IBM on how to continuously evolve. There was nothing sacred that cannot be changed. IBM was a hardware company. Now it’s a services company. It doesn’t necessarily matter what products we make. It matters we stay intact as an exemplary organisation that is preferred by our stakeholders.

11. I would now like to speak on three topics – scalability, resilience and innovation.

SCALABILITY
12. As we transition towards our 30% market share target, can we continue to operate the same way? Our success to date, in my mind, owes a lot on our ability to listen to our customers. And to customise our solutions to meet their unique needs. As we expand further, will we continue to do this? Or will we start ‘automating’ some parts of this customer experience? If so, will that process efficiency come at the expense of quality? Sometimes, efficiency comes at the expense of quality. And vice versa. We must ensure one doesn’t compromise the other. In other words, is our customer focus scalable? Can we effectively replicate the essence of our marketing across a wider geography and a broader set of customers?

13. Similarly, as we expand, are we confident of retaining and building on our capabilities, knowledge and experiences? On the focus that quality is everyone’s responsibility? Are these institutionalised, or are they only inside the minds of Tan Sri Lim and other leaders? For Top Glove to sustain growth, our capabilities, knowledge and experiences must be institutionalised. They must become Top Glove culture. These must become our organisational strengths. Locked inside the minds of individuals, they are in fact organisational weakness!

RESILIENCE
14. Next is resilience. We operate in an interconnected and dynamic global economy. A peace accord in Africa, or outbreak of a disease in Asia will be felt in every corner of the world in a matter of days. When the Great Depression of the 1930’s started in the US, China’s economy stayed intact. Japan’s economy shrunk a very mild 8%. Today, it’s a different story. The 1997 Asian Financial Crisis spread across the region in a matter of months. Europe still has not recovered from the 2008 Global Financial Crisis.

15. Top Glove needs to build resilience to withstand such shocks. There is no hiding from it. No balance sheet is strong enough to face such onslaughts. There are two aspects to resilience – strategies and systems, and people.

16. Firstly, we need to examine if our strategies are sufficiently robust. On one hand, can our plans withstand an environment of depressed global economy? On the other hand, how quickly can we increase production to meet surging demands when a health crisis strikes? Are our planning and resource allocation nimble enough to cater for the fluctuations of the global market?

17. Oil & Gas industry is very good at this. The industry has gone through crude prices of USD 40 to USD 140 and back to USD 50 within one decade. Such fluctuations can cause havoc to any industry. But Oil & Gas companies are still standing. OPEX cuts of 30% and CAPEX cuts of up to USD100 billion have been announced in the past six months. Close to 100,000 jobs will be lost before the prices recover. Eventually, the investments will return. So will the jobs. But the companies need to be resilient enough to capture the next up cycle. It is this kind of resilience that we need.

18. And then there is the resilience of our people. How do we keep our people passionate and energised through the ups and downs? How do we equip our people to handle the market fluctuations and be nimble enough to adapt fast? We can. By adopting a wholesome talent development approach. While we develop specialists for each functional area, we also need to develop generalists who are able to integrate multiple functional perspectives in decision making. Just as we need the botanists who look after the individual trees, we also need the rangers to manage the forests. Leaders who can provide stewardship for the benefit of the entire forest, and not deciding on the narrow interest of an individual tree. For people to take on different roles in their career, the organisation must provide a safe environment for the talent to take on new challenges.

INNOVATION
19. That brings me to the third topic: innovation. We always associate innovation with success. We very often fail to recognise the journey towards that success was filled with failures. This is not fair. We must give credit where it is due. We must give credit to failures that takes us closer to the success. There is a saying, “Fail cheap, fail fast”. It is about creating a culture where our talent feel secure to try new ideas, knowing fully well they could fail. In such instances, our performance management system must acknowledge the effort and the passion shown in trying new ideas. And reward it appropriately. If we do not encourage innovation; if we do not acknowledge failures as steps towards success; we will not transform our organisation. We can grow, we can expand, but never make the leap.

As the saying goes, “Thomas Edison never failed, he just found 10,000 ways the light bulb wouldn’t work”.

20. Innovation is not just about technologies or big investments. Innovation is in the mind. What we need is an innovative mind set. A mind that will continuously challenge the status quo. To start, we ask the question, “Do I need five steps in this process?” Even better, “Do I need this process?” It is a mind that is always looking for improvement. “Why am I doing this?” “Is this still relevant.” So, challenge the status quo!

LEGACY FOR A SUSTAINABLE FUTURE
21. As we set our sails for the ambitions ahead, there will be storms. And rough seas. We must stay the course for the True North. Look beyond our immediate goals and KPIs. Always look at Top Glove’s Vision. If our department goals are not aligned with the Vision and that of other departments, quickly realign. Our plans and actions should always be examined for ‘sustainability’. If there are two Top Gloves: Top Glove today and Top Glove tomorrow, do what is best for tomorrow’s Top Glove. Never compromise tomorrow’s outcome for today’s output. Our stakeholders will expect it. Our shareholders demand it.

22. I would like to conclude with a Greek proverb that is very relevant to today’s theme. “A society grows great when old men plant trees whose shade they will never sit in.” Tan Sri Lim planted the seed. You all water it. Our young recruits will get the shade.
Ladies and Gentlemen,

23. I wish you a productive day ahead. I wish you every success in transforming Top Glove into a learning organisation. One with scalable capabilities, resilient systems and processes, and innovative and passionate talent. That Top Glove will bring us into a better tomorrow.

Thank you.