[stephenkhoo]

Do you recall the old days when you find a provision shop under every flat, today these are being moved or replaced by large franchises NTUC, Giant, Econ, Shop n Save, Sheng Siong or maybe you find a 2 dollar shop like Denso. Why is this so? I guess its simply the business environment has changed dramatically over the last decade. Similarly you find less shops selling pets or tailoring like seamtress. Far more in common are coffeshop stalls losing their authenticity and originality but simply another copy of franchise. If we ladder this up the business chain this simply translates to franchise modeling such as Subway or Macdonald's. Ngiam's perspective on wealth creation is invaluable but this is simply not achievable without opportunities in demographics and environment. Coincidentally by chance, I am reading this book Outliers by Malcom Gladwell, it gives an insight and analysis of why in the history of mankind certain people succeed and this certainly complements the words of Ngiam

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The ability to think outside the box can mean the difference between spotting opportunities and seeing obstacles
By Ngiam tong dow

IN the 1970s, the Singapore Administrative Service practised the Shell Appraisal System. Shell believes that the candidate assessed to have the highest potential (CEP) has a better chance of succeeding in a higher level job than the candidate with a lower CEP.

To derive the CEP, officers are assessed on their four "HAIR" qualities. "A" for power of Analysis, "I" for Imagination, and "R" for sense of Reality. " H" stands for a high level vision from a helicopter.

The helicopter is just a mechanical flying machine without a life of its own. To me, the more dynamic image is that of an eagle soaring high in the sky sweeping the terrain below with its all round vision. Spotting a rabbit scurrying in the grass below, the eagle swoops down and carries off its prey in its sharp talons for dinner.

The eagle reminds me of successful entrepreneurs constantly on the prowl for opportunities. When he spots an opportunity, he seizes it instantly leaving his accountants to do the cost benefit analysis for a bank loan.

The entrepreneur has tremendous reserves of energy. Work is his life. A tycoon friend of mine told me that his greatest satisfaction is derived from vaulting over higher and higher risks successfully.

I do not know whether MOF (PSD) is still practising the Shell Appraisal System. As CEP has to be validated by actual performance, I would be glad if PSD can compile the track record of all our administrative service officers assessed to be high flyers over the years to determine whether they had lived up to their CEP.

When I was first appointed a permanent secretary, my minister Dr Goh Keng Swee told me that my core responsibility was to move the ministry's competence to a higher plateau. And he added that if I have myself reached the limits of my own competence, I should vacate the post. Knowing when to quit is the hardest decision you will ever have to make of yourself.

I believe that while many Singaporeans are competent in our jobs, few among us are brilliant. This dawned on me when I attended a business function nearly thirty years ago. One hundred guests had gathered to celebrate the business success of one wealth creator. The rest of us, bankers, accountants, and PR consultants were only there to help him manage his wealth.

I went home quite dejected.

I believe that Singaporeans and Asians in general think within the box because of our didactic system of education. We are taught to respect our parents and our teachers, never to question them. In Jewish culture, the child is encouraged to ask questions of his teacher.

I understand that the role of external examiners at NUS is to validate that our students are up to the standards expected from questions set within the curriculum. They do not assess for originality of thought. If that were the case, how do we differentiate between a First from an Upper Two degree award?

I had suggested to NUS that external examiners be asked to set two out of 10 questions outside the curriculum. This is to test whether our graduates are able to think outside the box.

I am told that at the California Institute of Technology (Caltech), Asian students normally top the first year classes. But when it came to the second and subsequent years when students are tested on application of knowledge, their American classmates begin to overtake them.

In the Shell framework, Asian students have strong powers of analysis without a high sense of reality. The Americans on the other hand, excel less in abstract thinking but are more practical. For instance, they can disassemble and reassemble their motor bikes. Asian students probably have no clue. Broadly speaking, the Asian can think while the American can do.

My one enduring recollection of my American classmates at Harvard is their conviction that no problem is insoluble.

As a permanent secretary in the Ministry of Trade and Industry, I was privileged to know some of our top business tycoons. The singular strength of these wealth creators is their ability to think outside the box. They spot opportunities where others only see obstacles.

Let me illustrate with some examples.

Mr Robert Kuok and his fellow Carpenter Street rice and sugar merchants saw me at Fullerton Building around 1963 with a proposal to develop a 5-star luxury hotel on Orange Grove Road.

Though the visitor numbers then were only around 400,000, he told me that those who are able to travel would be those who would pay for luxury accommodation. He would therefore build a luxury, not a budget, hotel.

It was a piece of contrarian thinking outside the box. Paradoxically, with an expected 18 million visitor arrivals today, we need to offer more budget than 5-star hotels.

Mr Robin Loh from Indonesia, who started life in Singapore as a taxi driver, went on to establish a shipyard to repair supply vessels. I was surprised one morning to read in The Straits Times that he had an order from a PRC company to build two oil rigs.

Knowing that his yard had never built oil rigs before, I rang him to ask how he is going to execute his order. He was irritated by my scepticism. He told me that as a businessman he gets the order first and then figures out how to execute it.

Robin Shipyard built the two rigs successfully, hiring an American naval architect to design them. The shipyard subsequently moved its operations to China.

One day, I asked Mr Teo Soo Chuan, a leading rice merchant, the ideal political climate for doing business. He told me that the political temperature should be lukewarm, neither too hot or too cold. He explained that if Indonesia is too hot, Singapore would be scalded by the ensuing chaos. If it is too cold (efficient), there would be no place for us.

Foresight

Thinking outside the box, Sir Stamford Raffles exchanged Bencoolen, a sliver of British colonial territory in Sumatra, for a minuscule rock outcrop called Singapore. What is it that Raffles saw in Singapore that the Dutch East Indies Company did not?

Perching on the southern-most tip of Asia, it straddles the Indian and Pacific Oceans. Its strategic geographic position was ideal for developing a free port to serve as the interchange for east-west trade and technology.

So when we see supertankers laden with crude from the Middle East sailing down the Strait of Malacca to discharge into our oil refineries, we are thankful for the foresight of Sir Stamford who began life as a clerk in the British East India Company.

He thought outside the box, seeing possibilities when others can only see rocks.

I was appointed EDB chairman in early 1975. My first public duty was to organise the ceremony for the signing of a joint venture agreement between Sumitomo Chemicals of Japan and the Singapore Finance Ministry to establish a 500,000 ton petrochemical cracker on Pulau Ayer Merbau.

Without natural gas, Singapore was an unlikely place to locate a petrochemical plant. There was no lack of sceptics and naysayers including The Straits Times which ran a series of articles pouring cold water on EDB's dream of a heavy industry.

Our partner Sumitomo told us that lack of natural gas is not an impediment. The plant could crack naphta, a by-product of petroleum refining into ethylene gas to serve as feedstock for the downstream plants producing plastics and other final products.

For a capital intensive project with a long gestation period, political stability and good governance are more crucial for success than availability of natural gas. Sumitomo's Japanese competitor Mitsui, building its petrochemical project at about the same time in Iran, abandoned its project when the Iran-Iraq war broke out. This gave PCS (Petrochemical Corporation of Singapore) the opportunity to pull ahead.

Finally, I would like to acknowledge the contribution of Dr Goh Keng Swee to wealth creation. As Defence Minister, he established Sheng-Li Holdings (now known as Singapore Technologies) to build up our defence industries.

Under his leadership, ST engineers reverse engineer to refurbish fighter aircraft and later build battle tanks and other equipment to a stage where we can compete with international defence companies in global markets.

More valuable than cost savings from producing our own arms is the knowledge accumulated by doing things ourselves.

After Dr Goh retired from government in 1986, there is no one to replace him as our wealth creator. GIC and Temasek are sovereign wealth managers for our national savings and reserves. They are not wealth creators.

So I conclude with the question: Should Singapore aim to be Jurong Island or Shenton Way?

The direction we set will have deep impact on our political, economic, educational, and labour policies.

What these policies are will have to be thought through by the Ministry of Finance and the Ministry of Trade and Industry, two ministries which I had served for the greater part of my 40 years civil service career.

The writer is a former permanent secretary who has served in several ministries and statutory boards, as well as corporate boards. This is an edited version of his speech delivered at the NUS engineering school yesterday