SINGAPORE: Entrepreneur Asad Jumabhoy is a member of the once-powerful Jumabhoy family whose name is synonymous with Scotts Holdings, one of Singapore’s pioneer property giants. Years of family feuds including one between Asad’s brothers weakened the family business and by the late 1990s, Asad decided to go his own way.
One of the first things he started as CEO of his Scotts Group was Asia Tax Free Shopping, a GST tax refund platform. Over the years, he’s been able to adapt and zero in on opportunities.
His latest project is UTU, a cross-border loyalty and reward points platform for consumers – a project he is working on with his son.
He goes “On the Record” with Bharati Jagdish about this, about staying competitive, and how he feels about the problems that plagued the Jumabhoy family business. But first, whether he felt a sense of apprehension in stepping out of his family business to go his own way.
Asad Jumabhoy: I come from a long line of entrepreneurs going back several hundred years, so my ancestors started out by taking sailing ships across from India to the Middle East. My grandfather came to Singapore and started with nothing. My dad started his business with his brothers with nothing. So, it was kind of par for the course really. I didn’t think twice about going out to start on my own because we’ve been doing this for a long, long time.
Bharati: We’ll talk more about the issues that plagued your family later, but first, you’ve said in a previous interview that your wife lent you S$250,000 to start up. Why was it that you had not a dime in your pocket and she had to step in here?
Jumabhoy: Well, it wasn’t “stepping in”. It was the way our families are structured. You work for the family and the family saved for you. I stepped out and I wanted to go my own way, so I kind of took the “go your own way” direction.
I really started bootstrapping the operation. It was kind of a good strategy. Well, it wasn’t really a strategy. It was more of a coincidence as well, but on the one hand it makes you accountable to somebody as opposed to pulling it out of your piggy bank and blowing it and have nobody to answer to.
So I had this family I had to answer to. I had my wife, my kids to support, so you’re very focused and you think, “Okay, how best do I use this opportunity?”
Bharati: Did you always know that this was what you wanted to do – go into business?
Jumabhoy: Oh, from a very young age. I think I remember talking to one of my siblings as we went to pick up my mom. I must have been about nine or 10. And I said even if I have a newspaper shop, I want it to be my newspaper shop. And it wasn’t a question of making money or not making money. It was having the freedom to choose, to paint the picture the way you wanted to paint it, to do the things you wanted to do.
ATTRACTING AND RETAINING TALENT IN A FAMILY BUSINESS
Bharati: What or who has shaped your business philosophy over the years?
Jumabhoy: Lots of things. You start with your parents. My mother prepared us to pick up the skills we needed to deal with life. My father taught me that no hill was too big to climb and to try. And between those two big guiding lights, I studied in the US and I kind of got adopted by an American family.
He was a businessman who started with absolutely nothing as an insurance salesman and ended up a huge owner of insurance companies and I learnt a lot from him. I used to go with him to the office when I was in the States, so I learnt a lot about corporatised businesses and then I came in to my own family business and I started to understand how you deal with relationships that were close to you and how you had to understand how to attract talent and retain talent. Because you’re family business, you have as good or an even better chance at attracting better talent.
A lot of people turn around and say, “Sorry there’s a glass ceiling. There’s this and there’s that.” It’s really a question of attitude because take this business we’re running right now: there’s an Asian angle. There’s a European angle. There’s an angle in the US. Maybe I would really look forward to having some of the junior people go out to Europe from Singapore and run the business there and I don’t mean my young son. I’ve got other young people working in the group that are very talented.
Bharati: But one might say there’s a glass ceiling for outsiders in a family business. How do you ensure that people get the message that is not the way you work?
Jumabhoy: Look at some of the large companies in the world. IBM was a family business. Coca Cola was a family business. Mars was a family business. Cargill is still a family business. All these businesses have demonstrated that there are ways in which you can cross from small businesses to big businesses, how you cross from startups to professionalisation and I think professionalisation is really a frame of mind as opposed to a degree that you earn somewhere.
If you’re mentally organized to understand and respect other people’s contribution to the firm, why should there be any difference? I’m also a firm believer in paying for talent and paying for performance. So whether that person is your family member or not, frankly speaking, is irrelevant.
Bharati: So aside from paying for talent and performance, what are the other strategies you use to attract and retain the best from outside your family?
Jumabhoy: Well, at this stage, there are different things you need at different stages. At this stage, we’ve just commenced our business after a couple of years of R&D. So it’s really finding people with high energy, high integrity, the ability to be flexible, etc. Having knowledge in areas that you need and also people who know they don’t know everything and where to go to get what they don’t know.
And as the company matures as I’ve seen my other past businesses mature, you start bringing in the specialists because you can then afford to bring them on board today full-time because there’s just that much more to do.
For me, I’m looking to provide people with opportunity, help people develop themselves, people who enjoy teamwork, collaboration. I think these are very important ingredients in the mix that you put to attract and retain talent. They’re not the only ingredients but these are some of the things that come to the top of my mind.
SPORT TEACHES YOU INNOVATION
Bharati: Tell me more about your latest project – UTU. Describe the genesis of the idea.
Jumabhoy: When I was in the tax refund business, I presented a paper about 20 years ago in Morocco to an entire management group. So there must have been about 50-60 people there if my memory serves me right. And it was really about engaging your customer and being a part of their lives and in the tax refund business, you pretty much have a touch point with your customer when they’re traveling on a business trip or vacation or shopping overseas or whatever.
But it’s always for that finite period of time and I’ve always had the belief that every tourist is actually a local and every local is actually a tourist. It’s just a question of where they are and when they are there and what they’re doing. So if you take a look at our rewards and loyalty platform, it follows the tourist or the local from the time they wake up to the time they sleep. So you’re a part of their lives all the time if they want you to be and we’re completely non-intrusive.
We’re very much user-centric so you can redeem your rewards from a retailer anywhere, in any country and there are no limitations. So if we go back to where this all started, it was 10 years ago when I wrote that paper about engaging customers, and frankly speaking there were two things that were missing in 2006.
Firstly, electronics, computers and W-Fi as we know it today. The tools that we have today were not there. No smartphones. So that was one missing ingredient. The second missing ingredient was that I was in the VAT refund business and we went through a series of private equity investors.
And the lesson I learnt was that they had a finite time horizon. They all say there is no finite time horizon, but there is one – preferably between 3-5 years because if you start looking at internal rates of return and duration, it starts falling off a cliff after a certain time unless you have those exceptional supernova opportunities that you can count on that. So the desire to actually create, I found, was not there.
We launched another product which is prevalent today called the dynamic currency converter where you use your credit card overseas and you pay in your home currency. When I tried to introduce that, I remember going to my board in 2000. To get investment funds, I had to make 12-15 presentations, the same presentations mind you.
Every time we went with an update, we had to repeat it three times over. It was the same guy. At first I thought he didn’t get it, but he got it all right. The problem was he was trying to evaluate if he wanted to deviate from the plot at all. His idea was, let’s harvest this business and then get out of here. So the long-term component was missing.
Bharati: Because you were introducing ideas that were ahead of their time?
Jumabhoy: No, I just think that they’re different and business as usual is business as usual. That’s why you see so many companies that have come up and have taken the space of companies that were in the market. It’s kind of difficult to change.
I mean if you’ve been doing the same thing so well for 40 years… go back to rubber tyre, wagon wheel concept. “Rubber tyre? No way. That’s not going to survive!” And of course everyone moved away from wagon wheel. I think history is littered with those stories. So I’m thinking that’s just part of the evolution.
Bharati: While you encounter individuals like these who’ve done things a certain way for 40 years and don’t want to change, where do you get that desire or the guts to change, to come up with new ideas that might be difficult for others to accept?
Jumabhoy: I think there are several stages. I think one is that you want to be relevant and markets change, people change, demands change, needs change. So to be relevant, you have to innovate.
Bharati: Conceptually, we all know this but some people take the steps to change and others don’t. So, what makes you?
Jumabhoy: I innovate because I have to feed my family. I don’t want to lose my job! I’ve got kids to feed so I’ve got to innovate and change. I think we should just look at things as they are and think about what you can contribute today? You woke up today. What are you going to do with the day? Do something useful.
It is all mindset because age helps in the fact that you’ve got experience and you know some of the things not to walk away from. It helps you that way. So the experience does help. But I just feel, I woke up this morning and what am I going to do today that is useful? And when I go home every night, before I go to bed I ask myself, “What did I actually do today? Pass? Fail?”
Bharati: What is your measure of “pass”?
Jumabhoy: I’ve never been asked that before. Well, my measure of “pass”, on a daily basis is: Did I get closer to the objective that we wanted to go? Did I put another brick in the wall? If I did, it means I’m building towards the strategy and then the other one is how did I relate to people today? Each of us has our pressures in the day and the idea is that I just want to be remembered as somebody who listened to somebody else.
Bharati: You might have the mindset to innovate, but how do you mobilise others to do the same?
Jumabhoy: Play more sport.
Bharati: Polo is your favourite
Jumabhoy: I think through sport, you learn so much. The biggest one is team sport. So whether you talk about polo or football, the thing about playing with another person is I hit the ball from here to there and I may have not have kicked it just right and you might not have been in the right spot. So you’re adjusting and I’ve got to adjust.
And if I see a space I pass it there and the competitor can see the same spot. So, I’ve got to put it in a spot where I think you can get to it before your competitor. So I’ve got to know something about you as well as the teammate. And then we’ve got to adjust.
We’ve got to read each other’s mind and that’s the whole thing about starting a business and innovating and all that. It’s the same thing. It’s a question of adjusting and adjusting, getting your plan right, testing, being rigorous, training, preparing. All those things are common with sport. So I think sports is a great way to get into innovation for the younger folk.
I guess everybody has eureka moments when it comes to innovation and they’re working on a problem and you say, “Wait a minute. I think I’ve found a solution. But when you’re looking for big moves, for me at least, it comes out of having done a lot of research in the area, then looking around and seeing what tools are available, what talents are available, how can we pull this together, what ingredients do we need to bake this one?
SINGAPORE NEEDS FOREIGN LABOUR
Bharati: Retailers today are facing a lot of difficulties, especially brick-and-mortar businesses in Singapore. What’s your advice for them, or some strategies that you think could work sector-wide?
Jumabhoy: If you look at retail, I ran stores for many years so I know a fair bit. A lot of it has to do with pricing policy around the world. You find different brands priced differently across the world, so that’s one big thing. And then there are component costs as well.
So whether you look at manpower, rentals, utilities and cost of goods. And the biggest item normally is cost of goods. Retailers promote, STB promotes and those are all good things but maybe some of the structural issues need to be looked at such as labour and the quality of service.
I go to restaurants in Singapore and when I say that I’m talking as a local but also taking into account the fact that I travel a lot, and there’s just not the body count in the restaurant to cover the level of service. These kids are working hard and they’re knocking themselves out and they’re trying to serve so many people. There’s just not the body count so it’s difficult.
Bharati: That’s why now there’s a lot of talk about automation. But do you think that truly is the way to go?
Jumabhoy: How are you going to automate serving a plate on my table?
Bharati: Well that might be possible with robotics and self-service and now, we’re even seeing food vending machines.
Jumabhoy: So now you’re starting to say, “Okay I’ll accept a different quality of service.”
Bharati: If not that, then what do you think the solution is?
Jumabhoy: There’s the question about how you do part-time, full-time crossovers in the management of staff. If you go to a lot of American restaurants, there’s a culture of university students who would be serving at restaurants, making extra pocket money.
Bharati: Of course one of the biggest issues is that there are not enough Singaporeans who want to do the job because it’s not prestigious and there’s not enough money in it. The government has also put curbs on foreign labour, so that’s causing things to get even worse.
Jumabhoy: Well, I’d say the macro picture, I’m trusting in my leaders to take care of for me. But I think looking at the micro issues, automation is only one part of the story and there are lots of great tools that have come in today like restaurant booking tools and things like that.
But I went to a local noodle restaurant that tried to automate the ordering process and it just became like factory-produced. And I’ve stopped going there because the experience was gone and restaurants are very experiential.
Shopping also, because it’s not a question of shopping online or shopping in brick-and-mortar set-ups. I will do both if there’s value in each. So I think they’ve got to look at the structure of industry. I think we’ve got to look at quality of service.
Bharati: Of course many retailers would say, these are things beyond our control as there are curbs on foreign labour, rentals are high and so on. How to work within those constraints?Jumabhoy: I went to Dubai and, there’s no shortage of labour there. But it’s not immigration. It’s people who come and work for a few years and then go home. What’s wrong with that? So it’s not an immigration issue. It’s saying, “okay, let’s have some diversity and pull people from all over the world. Similarly, we need foreign labour.
Bharati: So you think that our government should loosen curbs on foreign manpower?
Jumabhoy: I think the government sees a lot more factors than we do. I’ve sat on both sides of the fence because I did a lot of work at Ministry of Health Holdings. I sat on the board there and I sat on the board of IDA, and you see a lot of problems from different perspectives and the government’s perspective is equally valid except that you don’t see it when you’re running a shop day-to-day. They are addressing many different agendas which are equally valid.
The question is, you’ve got to make a call to say what kind of experience we want to deliver? As a country, as a people, as a service culture, as a retail culture, as a tourist culture, what is it we want to deliver and is that what the market wants to buy? And I think by going through these areas, policies, it’s a question of trying to triangulate and finding a way forward.
As a country, we, the government and the people, should ask ourselves what is the image we want to portray to the world. Do we want to portray high-touch, high-quality service delivery levels?
We’re going to need help because we don’t have enough people. We’re also telling our people to go get an education and uplift your skills level. That’s great. But you still got to have somebody clean the bathroom.
Bharati: Of course if there weren’t a lot of political pressure, or at least if infrastructure had been built ahead of time to accommodate a larger number of people in Singapore, there wouldn’t have been such a rejection of an increase in foreign labour to begin with.
So it’s a lot of factors that have led to this policy including the birth rate etc. and a lot of factors that have led to the rejection of the policy as well including the fact that Singaporeans perceived foreigners as taking away white-collar jobs, jobs that we actually want to do. We should note the government is taking steps to address this.
STOP COMPLAINING ABOUT FOREIGNERS AND COMPETE
Jumabhoy: I think it has to do with education and skills level. If you turn around and say, “I’m as good as the foreigner that comes in. I’m probably better-educated. I’m happy to compete.” it’s fine.
It’s a question of getting our local men and women to say the same thing. You’re good enough to compete, so compete. Stop complaining. Let anybody come. You want to work or you don’t want to work? You want to work hard or you don’t want to work hard? You want to get somewhere in this world or you don’t? It’s up to you.
Don’t come and tell me foreign guys came in and took my job. Improve your skills. I see so many kids today come from every kind of background, well-of backgrounds and not well-off backgrounds. They’re knocking themselves out learning. It’s really a question on how much you’re willing to put out and how hard you’re willing to work.
Bharati: Of course some might say no matter how hard I work, I’ll never really be able to compete because the foreigner doesn’t have to deal with the high cost of living that I do and therefore is willing to accept a lower salary than me, so he becomes a more attractive employee.
Jumabhoy: That’s market practice. Every time you interfere with market pricing, you end up in a mess. It’s not just Singapore, every country. If you put currency controls for example, you’ll get a problem somewhere else. All these things are interconnected. It’s been proven and it’s very painful to prove, but the market economy is a good allocator of resources.
If you have a feeling that your talent is worth more than what you’re being paid, go do something else. Go start your own business. If the market is saying, “Asad, I’m not willing to pay you so much for this job.” then I have two choices: either I change my job and change my focus or I stick with this and accept my position.
FAMILY FEUDS AND LESSONS LEARNT
Bharati: Over the years, I’m sure you’ve made mistakes. What are the ones that stand out for you and the lessons you learnt from them?
Jumabhoy: Well, it was probably over 20 years ago in my original family business where I learnt the pitfalls of family businesses. As a result, I’m very careful now about how I structure my businesses because of my past family history.
I make sure I structure my businesses to be as fair as possible to as many people as possible. In traditional Asian families where it is the question of “because you are younger than me, you have to listen to me.” Okay fine, so I’ll listen to you out of respect and love, but when it comes to business judgement etc. you’ve got to take the business issue and that wasn’t always the case.
Bharati: You are doing your current business with your son actually?
Jumabhoy: Yes, he joined me.
Bharati: How do you apply what you’ve learnt to how you manage him?
Jumabhoy: The same plus can be a minus as well. So we can solve a lot of issues around the dinner table but you also get put on the spot around the dinner table. The issues tend to be how people perceive you and how people try to make things different. All I’m asking for is to be treated the same as anybody else and that’s all my son is asking for as well.
So, it’s really more people’s perception of you as opposed to your perception of yourself or your relationship with your son. As management science itself has progressed, as people like me went to management school, today my son’s in management school, my other son is learning to become a lawyer, you start to pick up a certain sense of corporate professionalism so you can take the best of that.
And then you can take the best out of entrepreneurship and you can blend it. So you have all the governance and the right structures and the right ways of doing things and at the same time, you’re not over- bureaucratic whereas at the same time, you’re also infuse a spark of entrepreneurship into the mix.
Bharati: So in a nutshell, the lessons learnt that you apply in business today?
Jumabhoy: Everything I learnt in the sandbox: don’t throw sand in people’s face, wash your hands before you eat – all those good behaviors that any corporation would have. I think the biggest lesson I’ve taken is that when you’re dealing or working with family and you feel you can actually lean on them because you have a second relationship – don’t do that.
Treat them with the same respect and care as you would treat any professional working in the firm because they are professionals and they deserve that.
Bharati: The disputes in your family’s past business were a very public issue in the 90s. How did you feel when all of that was happening?
Jumabhoy: Even today, if I’m faced with a situation where people want to fight, I’ll say, “You wanna fight? Great. You two guys fight. I’m gone.” I’ll try to help you sort your problem out, but don’t expect me to get drawn in.
There are only 24 hours in a day. I don’t like to fight. I don’t fight with anybody. That’s a better way to live life. I find a way around to avoid conflict and if people are entrenched in conflict situations, try and help them out if you can but if you can’t, move on.
Bharati: What do you regret the most in your life so far?
Jumabhoy: It’s a journey and I wish I could be working with my brothers again because I love working with my sons.
Bharati: What do you miss the most about working with your brothers?
Jumabhoy: Just the camaraderie, and just sort of the hanging out.
Bharati: It wasn’t all rosy though.
Jumabhoy: Well, I tend not to remember the pain points so much. My wife tells me I’m the eternal optimist and maybe I am. I don’t remember the pain. I don’t remember the time when I entered the army and I was paralyzed for three months because I had a slipped disc in my neck.
I don’t remember things like that. I remember it as what wonderful discipline that I, an undisciplined person, received when I went to the army. At least for me, take the best of what you can and leave the rest behind.
In terms of regrets on the professional side, I’m wondering had I worked outside of my family business for a period of 4-5 years, whether that would have helped me or not. I’m not sure. I ended up picking up a lot of those skills by building a large business with partners. So I learnt from doing in my own shop, rather than picking it up outside.
I also miss working with my dad but now he’s 90 so he doesn’t work anymore.
Bharati: He inspired you a great deal.
Jumabhoy: My dad did and my late mother did, as I mentioned earlier.
NEVER STOP LEARNING AND TRYING
Bharati: What’s the most important lesson you think you learnt from your dad?
Bharati: And if you fail?
Jumabhoy: Try again. And from my mother, it was: if you’re going to try, at least use your brain and get yourself ready. Have what it takes to take the next step. But sure, you’re going to succeed at some things and fail at others.
Bharati: Do you think we, in Singapore, need to improve our culture when it comes to accepting failure?
Jumabhoy: I would say we need to change our attitude towards success and failure.If people fail, it’s not because they’re not doing the right thing. I hired a guy in our technology team who actually tried to build a loyalty system in his country and failed. In his case, it was that the business strategy was not robust.
So we felt that we had the business strategy but then he had certain customer-facing technological know-how which I thought would be useful to our business and it’s proved correct. It may not have worked for him in his case, but with a little bit of shaping, a larger team and having a more rounded approach with different skill-sets etc. the gentleman is a success.
Bharati: So how do you think we can develop a culture here of being more accepting of failure?
Jumabhoy: Start with bankruptcy laws and work your way from there. The US has a very good approach to it. From my understanding, if your company goes into chapter 11, you either reorganize and start again or the individual can go start again. If it’s a failed effort, it’s a failed effort, move on. If the guy stole the money it’s a different issue altogether but if it’s a business issue and it didn’t work out, it didn’t work out. But never stop learning and trying. Try, try, try again.