SME – Entrepreneurship Global Conference, Melbourne 3-4th July, 2008

Revolutionary Empowerment: A Re-look at Spirituality, Cultural Integrity

and Development

Murray HunterSME Unit

University Malaysia Perlis (UniMAP)

Some Wisdom from similar situations

The Concepts

To equalize rural-urban affluence requires a great effort of imagination; …. Systems of ideas and values that suit relatively affluent and educated city people are unlikely to suit poor, semi-illiterate people. Poor people cannot simply acquire an outlook and habits of sophisticated city people. If the poor cannot adapt to the methods, then the methods must be adapted to the people.

E. F. Schumacher

Competitive advantage grows fundamentally out of value a firm is able to create for its buyers that exceeds the firm’s costs of creating it. Value is what buyers are willing to pay, and superior value stems from… providing unique benefits that more than offset a higher price.

Michael E. Porter

God does not change the conditions of a people until they change their inner shelves

Qur’an 13:11

Opportunities are a product of our mind and these visions can become the design of our future with skilful and creative utilisation of scattered existing and forgotten resources to create great unimagined synergies. This is the true power of creativity that God has given humankind.

True Empowerment only comes from economic development rather than

political meansThe Kadazan/Dusun People in Sabah, Borneo

“I fought the law and the law won”

Sunny Curtis and The Crickets 1959

Background

• 2-3 million population with different ethno-cultural background

Background

• Predominantly rural population

• Lagging along in national development

Background

• Lower education disposition

Background

Background

• Currently unable to benefit from growing

tourism industry

Background

• Ageing farmer population

Background

• Limited knowledge of potential

opportunities and matching skills

The Major Blocks to Development

• The current “psych” of farmers

• Growing rural unemployment

• Unbalanced affluence (town-rural)

The Probable Causes

Lack of Ideas

Lack of education and skills

Narrow mindset

Feeling of powerlessness – lack of access to markets

Lack of resources

Lack of will

Existing Approaches

Not necessarily market orientated

Dependent on local ‘champions’ to convince others to follow

Work on a model that may not necessarily suit Pattani, i.e., farmers in Satun younger than

Pattani.

• Other Agency Programs

Existing Approaches• OTOP

Successful where participants are entrepreneurial.

The channel has become too crowded to provide special attention to new communities

May not be an effective medium to provide sufficient incomes to ‘novice communities’

What Can be Done?

Ideas Opportunities Solutions Realisation Performance

Spots Evaluates Selects Targets

Creativity Innovation Strategic Thinking

Management Capability

Capabilities Governing Competitive Scope

Competitive Advantage

Costs: to customers Knowledge: Industry/market/technical/p rocess Relationships: Customers/suppliers/distri butors/relative power Structure: Ability

Differentiation

Competencies Entrepreneurial, Opportunity

Identification, Network, Conceptual, Organisational, Strategic, Commitment,

Resources

Culture

Values

Beliefs

Assumptions

Leadership

Theories in action verses Espoused

Norms and group behaviour Organisational

learning (single or double looped

Productivity & effectiveness

Stories, myths, heroes, artifacts, informal behaviours

Negative Attributes

Positive Attributes

Destruction

Growth

The Cultural Dialectic

Innovate --------------------------Avoid mistakesThink long term--------------------Live for todaySave money----------------Spend for the futureWork by oneself---------------Work as a groupBe flexible------------- Follow rules and normsCollaborate-------------------------------Compete

Make your own decisions---Make joint decisions

Opportunity is a Construct

Ability to make linkagesAnchoring a source

of innovation

Having the right Skills

Networks

Resources

Product/MarketStrategy

VisionPlatform

Dream, ego, aspiration, greed, survival, education

ExperienceReference & Benchmark

Cognitive, hemispherial & field Perception

Source Explanation Examples

The unexpected success, failure or

external occurrence

Success of a revolutionary product or the application of technology from one industry to another, sudden or unnoticed demographic changes caused by wars, insurgencies, migration, etc.

Apple computerRapid decline of Proton’s market share

An incongruity between reality as it actually is and

what it ought to be

A change that is already occurring or can be made to occur within an industry. It may be visible to those inside the industry, often overlooked or taken for granted.

Sugar free products and sugar replacements due to concern for healthIncreasing demand for travel and holidays due to increasing incomes and leisure time

Inadequacy of an existing

technology or business process

An improvement in process that makes consumers more satisfied based on an improvement or change in technology.

Caffeine free productsMicrowave ovensMobile phones

Changes in industry or market

structure

New ways and means of undertaking business based on identified opportunities or gradual shifting of the nature of the industry.

Health care industryEducation industry – private education

Perceptual changes

Changes in peoples awareness founded on new knowledge and/or values or growing affluence leading to new fashions and tastes

Leisure and exercise industry aerobics & gyms

Demographic changes

Gradual shift of demographics in population by age, income groups or ethnic groups, etc

Establishment of more retirement homes

New knowledge New knowledge or application of existing theoretical knowledge into an existing industry that can create new products not previously in existence

Video and VCD industryRoboticsBiotechnology

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Attributes of the Entrepreneur

The elements of innovation

Culture Ego

Strategic Thinking

Innovation

FocusCreativity

InterpersonalInteractions

Hunter, Baharuddin (OUM) & Rozhan (UIA): Alpha Model of Innovation

Tempera -ment

Ability

Skills

Learning

Creativity

Solutions Opportunities

Ideas

Creativity

Lateral thinking

Serial Thinking

GroupEducation

Culture

Strategic Thinking

Personality

Hunter, Baharuddin (OUM) & Rozhan (UIA): Alpha Model of Innovation

A

B

C

D

Visual Holistic Intuitive Innovative Conceptual Imaginative

Conservative Structured Sequential Organised Detailed Planned

Interpersonal Kinesthetic Emotional Spiritual Sensory Feeling

Logical Factual Critical Technical Analytical Quantitative

Number Crunchers Human Machines Achievement Orientated Performance-Driven

Administrators Bureaucrats Production-Orientated Task-Driven

Teachers Social Workers Feeling-Orientated Value-Driven

Entrepreneurs Explorers Future-Orientated Risk-Driven

Attribute Small Business Entrepreneurial Business

Risk Risk is to be avoided by undertaking a business activity that is already proven to be successful. Therefore business models will not be novel.

Ideas and opportunities are always risks. Every village and every person is unique and will have different ideas that suit them.

Need to Achieve A small business is totally orientated towards a financial return.

Financial return may not be the prime motivator. Individuals and groups may want to produce something they like and have pride in.

Creativity An enterprise will fit into a proven model so not much creativity is needed.

The enterprise from the first idea may be driven by many types of creativity, and creativity itself may be a source of satisfaction.

Flexibility A small business is a business operated through a disciplined routine in most cases.

Individuals and groups may be looking for maximum flexibility in an enterprise, so it can fit in with their life, rather than they have to fit in with the small business.

Change Small businesses rely on little environmental change for success.

Change in the environment may suit individuals and groups as they don’t want to get locked into routine, and change prototes their creativity.

Independence Financial independence is the objective. We are already independent and don’t want a business to lock us into a strict routine.

Foresight A daily, weekly, monthly or seasonal cycle that is predictable.

We may have to keep coming up with new things to keep the enterprise going.

Initiative There are very tight resources to have much initiative.

We rely on initiative to keep going, and all initiatives are considered.

Control of destiny The future is controlled by sales in the marketplace.

The future is in our hands of what we want to be.

Commitment Total commitment. I want to be committed on my terms.

Leadership I am the leader and do all tasks. Leadership is defined by tasks.

Chemical Raw Materials Packaging

Style

Branding

Promotion

Finance

Logistics

Company Fit Manufacturing Processes

Competencies

Competitors

Material Availability

Sourcing

Trends

Tastes

Technology

International Markets

Domestic Market

Relative Competitive Advantage

Channels

Regulation

Feedback

Feed forward

Pioneers Early followers

Early

Majority

Late

Majority

Late

Followers

Product LifecyclePotential Profitability

Time

Concept

Risk Taking

Competitive

Risk Taking

IP Value &

NoveltyIP Value

Prof

it

Tissue Culture

Actualisation

(The Artist) Self-fulfillment

Rice

Soap Fresh

Vegetables

Most Household Cleaning Products

Water Purifiers

Fashion Clothes (e.g. Jeans)

Chewing Gum

Car Air Fresheners

Travel & Vacations Fine Fragrances

Aromatherapy products Luxury cars

Nutraceuticals & herbs

Books Fine Dining & Processed Foods

Study after retirement Fresh vegetables (Organic)

Esteem (The Executive)

Achievement, prestige,fulfillment

Social (Worker) Family, relationships,

workgroups

Safety (The Farmer) Home, Security and stability

Physiological (The Hunter) Basic Biological Needs – Food, water, air

Staples: based on survival (fear)

Necessities: based on what is good (existence)

Community: (acceptance)

Responsibility: (hope)

Fulfillment: (dreams)

Figure 1.x: An Islamic Business Framework

Ad-Din

Al-Ilm

Al-Iman

Al-Amal

Syar’iah

Fard’ain

Fard Kifayah

Halal Toyyibat

Tahwid

Ibadah

Amanah Al-Falah Ummah

Musharakah Al-Ta’awin

Al-Fasad

Shu’ra

Overseas Halal Food Product

Organic Farming Concept

From the soil to market

Look for novel strategies

Farm

What to grow?

How to grow?

When to grow?

How much to grow?

Basic agriculture

Basic farm management

Group management

Cash Management

Logistics

Timing & storage

management

Fresh Retail

Retail Management

General ManagementCustomer service

SalesProduce selection

BrandingVertical supply chain

The Business Model

Value added productsFertilizers & cosmetics

New Product Development

MarketingSales

The Village “MBA”“Moving by Action”

Aveda The Body Shop Thursday Plantation

Sureco Hain CelestialGroup

Est. Sales USD120million (1996)[i] USD619mil

(2006)

USD1.5Billion (2006)[ii]

USD85Million (2006)[iii]

USD40Mil[iv] USD738Mil[v] (2006)

Location USA UK Australia Malaysia USA

Established 1978 1976 1976 1999 1926

Products Personal Care Personal Care Personal Care Herbs Organic food and cosmetics

Basic Philosophy To sustain the environment and

give back to communities

Social humanitarianism activism on many

issues

Natural tea tree

products/natural medicines

Halal & Toyyibaan

Free of artificial ingredients,

Kosher foods

Ethics Yes

Green Yes Yes Yes

Natural Yes Yes Yes Yes

Organic Yes Yes Yes

Community Yes Yes Yes

Cultural

Religious/Spiritual Yes Yes

Mode of Distribution Direct Marketing/Salon

Retail and e-Commerce

Direct and through

distributors

Direct Marketing

General distribution

Owner Estée Lauder Companies Inc.

Loreal Chris Dean & Family

Private Ownership

Listed company

C.K. Tang, Bukit Bintang

Cosway

Specialty shops in KL

Kuah, Langkawi

OTOP (Under IMT-GT) Working on MOA with them now

Taman Warisan, Putra Jaya

Internet

Eventual Export

Ava

ilab

ility

Incr

ease

s

Usefulness Increases

Media Reports

Ideas

Data

Information

Knowledge

Wisdom

The Continuum from media reports to wisdom in relation to availability and usefulness

Issue Comments

Focus Paradigm Requires focus on concept of food where present focus is on cultivationThis requires researchThis requires entrepreneurship approachConcepts not understood by farmers

Basic Research Needs access to worldwide dataRequires availability of suitable germ-plasmasRequires basic R&D to determine whether crop technically suitableRequires basic R&D to determine if potential crop is economically feasible

Crop Management & Processing

Propagation technologiesHow to plant, cultivate & manage to cropHow to harvest, extract, store and handleHow to processHow to packageTransportation and storage

Marketing Infrastructure Require coordination of production with demandRequire correct channels of distributionRequires a marketing strategy

Economies and Logistics Requires enough volume to economically transport and distributeRequires solution to inconsistencies of quality and production

Organisation Need committed people with strong leadership and trust

Government Need to translate support into actionNeed funding allocations

Finance Very difficult to obtain funding for these projects

Consumers Need efforts for education & promotion

Umbrella Brand (Marketing Company)

Network

R&D Support Cluster

Entrepreneurship

Ideas Opportunity Identification How to make

skills Market Skills

Foods

Herbs &

Cosmetics

Other

Traditional Products

Funding through

“prospectus”, Unit Trust,

Zakat, Closed Markets

Direct Marketing

Internet

Collaboration with larger companies

(MNCs)

Selected Markets

Potential Micro Finance to Producers

Organic Farming, Fairtrade, Halal, etc

Business CarbonFootprint

1. Recognition 2. Desirability

Selected branding paradigm to highlight the project’s offering and values the group stand

for in the international marketplace. (see figure branding typologies). This branding

should show natural (fully natural products)Organic, Sustainable production,

Community involvement, cultural and religious identity, and within an ethical

business framework.Trademarks and certain Copyright

Information

The product technology, i.e., natural, organic, cultural and spiritual aspects should

be reflected incorporated into the product. Thus the products require specific new

knowledge, process and protocols to achieve these ambitions.

Patents, Registered Designs, Proprietary Knowledge and branding

3. Form 4. Emotional Connection

Product manifestations must reflect where and why the products exist through copy,

materials and form.Copyrights and Trademarks

The products should reflect the consumer ambitions for natural and organic products

with a cultural and spiritual base and understand their direct contribution to the

community.Brands and Trademarks

The company would act according to the following principals;1. Commitment to Social Justice in Organic Agriculture 2. Transparency and Accountability 3. Direct and long-term trade relationships built on trust and mutual respect. 4. Equitable distribution of returns to stakeholders5. Communication and information flow 6. Skills development and capacity building 7. Internal ethics, and8. Professionals manning the PC, support the local community[i].

[i] Principals set out for peoples companies by Dr. Subash Mentha, Bangalore, India, as communicated to the author.

Technology

Scientific knowledge used in practical ways in industry

Oxford Dictionary Definition

Scientific

A way of doing something or thinking: Careful and logical

(Adj.) Oxford Dictionary

Innovation

The introduction of new things, ideas or ways of

doing things Oxford Dictionary

Invention

The Ability to have a new or novel idea

Novelty

the quality of being new

that there “is also the tendency for Asian countries, including Malaysia, to deal with the issue of values in development by Importing many technologies and systems wholesale from

abroad without going through the process of mental transformation necessary to master them fully. Although

Malaysia is going through rapid transformation, our growth is one without development in the context of knowledge

contribution to science, engineering and technology. As long as we are consumers and operators of

sophisticated techniques, plants and technologies imported wholesale from abroad, we are to a certain

extent undergoing a technology-less form of industrialization. This transformation of values and attitudes is a key issue

in the nation’s development agenda”[i] .

[i] Asma, A., Going Glocal: Cultural Dimensions in Malaysian Management, Kuala Lumpur, Malaysian Institute of Management, 1995, P. 179.

• Minimise Production scale to account for initial low sales/production quantities and lower capital

investment

• Mobile GMP Facility

• Simplified Technology

Resources & Finance

Resources (Infrastructure)

Zakat

• One of the 5 pillars• Distributive justice (juristic & mandatory)• “zakat revenue can be spent under tamlik

mechanism for providing an opportunity or raising productivity of the poor. Viewed from the long term perspective the poor would become in time self-reliant, hense reducing the national burden of spending money on social security schemes.”

Khaliq Ahmad 2002 Intellectual Discourse Vol. 8, no. 2 (IIUM)

Element Existence

Values Most spiritual doctrines and religions have very positive values towards enterprise, independence and empowerment. These have to be brought to the surface of some cultures or sub-cultures, i.e., refocusing on the functional rather than the dysfunctional aspects.

Confidence Confidence is a group phenomena and can be improved through engagement of group processes to achieve new ways of seeing.

Ideas The skills of ideation can be developed through access to communications technology and developing both partial and whole brain thinking.

Potential Opportunities By linking ideas to markets, modes of entry, resources and skill needs, potential opportunities can be constructed.

Product Focus on themes rather than marketing mixes, look for ways to incorporate consumer fears, existence, acceptance, hopes and dreams in the product (spiritual materialism)

Markets Markets exist in various forms and segmentations with much more fragmentation, coupled with the ability to communicate are potentially accessible to village communities. Identify aspirations of consumers, connect products and channels to these aspirations.

Technology Technology is a way of how to make and do things. Product manufacture can be undertaken in scaled down models to suit decentralization, small unit output and flexibility. The focus is on how to do things in more cost effective ways, within the existing cultural socio-organisational setting.

Competitive Advantage In many FMCG markets competitive advantage has more to do with theme, schema and branding, through selected channels of distribution, than economies of scale. The product is a fulfiller of dreams.

Skills Not all the skills taught at formal educational institutions are needed to start an enterprise. In this regard its only necessary to provide people with what they need from the point of view of business, product development and production. There is a need for the “village university” to focus on showing people how to see, learn how to do and connect to consumers.

Agency/Networks Through modern communications technology (internet & travel) it is now possible to contact and interact with very wide groups of people, including agencies of interest, customers, grant agencies and sourcing know-how.

Logistics Logistics have advanced in recent years and can be coupled together such as the internet and EMS to create direct logistic systems between producers and consumers.

Resources We have to learn to use what we have and utilize these limited resources innovatively. There are many methods of alternative funding that can be explored and set up, i.e., Zakat, unit trusts, closed equity markets, etc.

Organisation New forms need to be generated from often discarded forms such as cooperatives. Cooperatives can exist at both production and market levels. People can form their own companies under umbrellas, organizations should be focused on linking the young with their older generation. Coalitions can be sort with larger organizations in developed countries for branding and market purposes. Organisations have to fit with existing social schema and develop from there, as people are ready.

The Challenge

OTOP Thailand

Farming in Fiji

Farming is primarily subsistence agriculture

Taro Yam Cassava Ginger

Chillis

Sunday

Monday Morning

Monday Afternoon at the Melbourne Wholesale Market