Commentary: For family-run businesses, change must come from the top

Commentary: For family-run businesses, change must come from the top

As the retail sector faces disruption, the push for transformation must come from top leaders - and the most important challenge remains getting buy-in from within, says Scanteak’s Jamie Lim.

(sl) scanteak staff
Scanteak staff in dicussion. (Photo: Scanteak)

SINGAPORE: Every business understands the need for change, to stay relevant as technology threatens to upend business models and disrupt entire industries.

Every business leader must drive transformation in the face of disruption or risk losing market relevance.

Nowhere is this more true than in family-run businesses where second-generation owners like myself face the twin challenges of both driving the business forward to meet fast-changing market demands while staying true to the values and legacies built up over the years by the business founders.   

When I took over the reins of Scanteak from my parents, some of the initiatives I pushed for include the introduction of new Point of Sale (POS) and Customer Relationship Management (CRM) systems, and most recently, an e-commerce platform with an online store.

An omni-channel approach was the way to go for retailers. Consumer behaviour was changing and we had to shape up or be prepared to ship out.

But some Scanteak sales staff were initially resistant as they saw an e-commerce platform as a threat to their personal livelihoods. Managers were unconvinced that there was an urgent need to change. After all, the physical showrooms were generating a healthy revenue and many staff members had grown used to pen-and-paper operations for a long time.

Even my own parents were sceptical that customers would purchase furniture online. Things had chugged along fine for over 20 years, so why fix what was not broken? There was a lot of convincing to do.

FIND ALLIES TO HELP DRIVE CHANGE

In my attempts to transform the business, I quickly learnt the importance of finding others who are equally convinced of your vision and can be ambassadors for change.

Advocating for a new POS system was not easy. A typical furniture showroom has an average of three to four sales orders a day, unlike a supermarket which sees a high volume of footfall and daily transactions.

Senior management and employees required more persuasion before they could see the need to digitalise sales or implement a POS system.

Fortunately, I had the support of my executive director and mentor, Jasmine Lim, who helped lead its implementation.

With her long years of service in the industry, Jasmine was an expert who had credibility with staff worried about being replaced by online platforms or additions to the work process. She helped to convince managers in the company that e-commerce was a winning bet and lent her expertise in management and dealing with customers over the years to develop our online store.

Thanks to her, and with further planning and staff training, we could effectively execute this change. 

Today, our sales employees are now adept in using the new POS system, and require no more than five minutes to generate a sales order, a task that used to take more than twenty minutes.

USE SMALL WINS TO FUEL TRANSFORMATION

Much of the reason why people in the organisation resist change and why other organisations fail to transform is because they think transformation involves the adoption of complex technology and necessitating a complicated, painful exercise.

This cannot be further away from the truth. In my experience, transformation can sometimes entail taking small steps and riding on the momentum to effectuate further change.

It was this insight that let me to start small in setting up our e-commerce platform. In August 2017, we started the first phase in Singapore with a basic e-commerce infrastructure, both to test the market as well as to make it easier for our staff to adapt to a new system.

Lowering the costs of adopting a new system aside, our sales benefited from this phased step-by-step approach. Rolling out this prototype earned us a new pool of customers who would otherwise not have visited our showrooms.

With our early experimentation and subsequent rollout of an e-commerce platform, I am confident we will see double-digit growth in 2018. Overseas offices who heard about our success in Singapore are now interested in following suit.

Recently, we hired a part-timer to do manual data entry work. To our surprise, what we thought was a three-month task turned into a week’s work for the undergraduate who simply wrote a computer programme to do the job for him. Apart from eliminating human error, the project generated great interest within the company.

When other departments heard about how this one guy could complete the task in record time, they too wanted him to write programmes that would cut similarly labour-intensive work. We paid him his full three months’ work as promised.

These may seem like small wins, but the small positive results help fuel interest and willingness to transform the business.

LET RESULTS SPEAK FOR THEMSELVES

From back-end operations to front-office sales, digitalisation has reaped benefits for our company.

Since the launch of our e-commerce platform, the fear that sales at our physical showrooms would plummet has not materialised. Instead, our online store has generated significant returns.

Productivity has also increased, especially when it comes to processing orders centrally. With our digital POS system, inventory and customer information are now available in real time and easily accessible by all sales and customer service team members.

Everyone in the organisation has been happy with the results over time and increasingly supportive of the changes needed for transformation. When I first entered the business in 2004, Scanteak had four stores. Fast forward to 2017, we now have 16 showrooms under our care.

Today, Scanteak has grown to a company of about 70 to 80 employees. No one was dismissed as a result of technology adoption or other business transformation efforts. Sales and profitability have grown by leaps and bounds.

Getting there has not been easy. The inertia against change, the attachment to the tried-and-tested, the worries about financing – these are the mindsets and obstacles that face the business leader committed to transformation. But change must start from the top and from within.

And in my opinion, family businesses are more poised for change than other businesses because there is more flexibility and commitment to transformation once there is buy-in from the management and staff.

Jamie Lim is the regional marketing director and second-generation owner of Scanteak. She is also a member of the tripartite Future Economy Council.

Source: CNA/sl

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