Thursday, 9 November 2017

Fear of failure holding Singapore back: Economist Intelligence Unit's Connecting Commerce report

'Kiasu' mindset could be hampering digital transformation efforts, it says
By Shelina Ajit Assomull, The Straits Times, 8 Nov 2017

Even as Singapore makes a push to modernise its economy, the country's fear of failure - which locals might recognise as the "kiasu" mindset - may be holding it back, a new study has found.

The Economist Intelligence Unit's Connecting Commerce report, which was released yesterday, placed Singapore 14th out of 45 cities in terms of how confident businesses are that the city's environment supports a digital transformation.

The study, which was commissioned by Australian telco Telstra, looked at five indicators: innovation and entrepreneurship, financial environment, people and skills, development of new technologies, and information and communications technology infrastructure.

Bangalore in India was ranked first in the report, ahead of San Francisco in the United States, with six other Asian cities in the top 10. Among South-east Asian cities, the highest ranked were Manila at sixth, and Jakarta at eighth.

Singapore fared most poorly in innovation and entrepreneurship, where it ranked 21st, and in people and skills, where it ranked 18th.

Mr David Burns, Telstra's group managing director of international and global services, said this is largely because innovation often involves being willing to fail repeatedly before achieving success.

Speaking yesterday at a panel discussion organised by Telstra, he said: "In corporate society in Singapore, failure is not in the dictionary, whereas that innovative environment works on trying things and seeing what works".

Mr Markus Gnirck, founder of home-grown start-up Tryb, agreed. He said: "There hasn't been enough learning or learning through failure, but conversation about it is finally happening."

And with thousands of tech start-ups making their home in Singapore, talent is needed. To keep up with their needs, universities and companies have to work together, the panellists said.

Big data analytics skills were most in demand for firms in Singapore seeking digital transformation, with 38 per cent citing these as their biggest requirement. Digital security came second, at 32 per cent.

The study polled 2,620 senior executives and at least 28 business leaders in 45 cities.

As for the role of government, 53 per cent of executives said Singapore's government programmes were the main source of financial assistance in digital transformation.

A further 43 per cent found these programmes and events to be the most helpful local resource.

Regarding the shortage of people and skills, Mr Khoong Chan Meng, director and chief executive of the Institute of Systems Science at the National University Singapore, called it a "happy problem".

He said: "If Singapore had just a few start-ups, we wouldn't be talking about this. There are 50,000 start-ups in Singapore and 10 per cent are tech start-ups. The demand means the local pool will almost never be sufficient."

Mr Khoong said executives eager to embrace the digital transformation find themselves in a "Catch-22" situation. They see technological innovation as a means of growing their businesses or advancing their careers, but are wary that pursuing innovation could also lead to failure.

He said: "People in Singapore aren't satisfied with what they have and want to achieve more, but they have the constraints of being less confident in this different agenda - digital transformation. This in-between situation will persist as long as they look for more growth."

Kiasu 2.0, or how to learn to love failure
By Michael Frese, Published The Straits Times, 13 Nov 2017

A recent report found that Singapore's deeply ingrained fear of failure may be hampering efforts to transform it into a hub for innovation and new technology. It was based on a study by the Economist Intelligence Unit which ranked Singapore 14th out of 45 global cities in terms of how confident businesses are that their local environment supports digital transformation.

Seven other Asian cities ranked in the top 10, with Bangalore taking first place - putting it ahead even of San Francisco. Singapore fared particularly poorly for innovation and entrepreneurship - a factor that should be seen as a wake-up call.

For decades, Singapore's kiasu culture has served it well. This cultural fear of losing out or of losing an opportunity has been seen as a key ingredient in the city-state's economic miracle and transformation from Third World to First.

But a fear of losing out has also instilled a deep-seated fear of making mistakes. Singaporeans are as driven as ever to want and achieve more, but many are held back by a lack of confidence and a culture that sees errors or failures as a career-damaging black mark against someone's name.

In a fast changing, so-called VUCA (volatile, uncertain, complex and ambiguous) world where innovation is key, the old kiasu mentality is no longer appropriate and a new approach is needed.

Put another way, making mistakes is crucial for innovation. As Albert Einstein is quoted as saying: "Anyone who has never made a mistake has never tried anything new." After all, trying new things is literally what innovation is about.


In my research on entrepreneurs around the world, I have seen how fear of failure leads to lower levels of entrepreneurship and is directly related to lack of innovation. In environments where fear of failure is high, particularly because errors are scorned and punished, it takes a brave soul to venture far from what is familiar.

Making mistakes is generally seen as embarrassing, messy, and something that is rarely easy to deal with. This does not sit well with a culture that values order and stability, and seeks to avoid risk.

But fear of failure - like a fear of flying or of public speaking - can be overcome. The key is developing a culture of error management, through which mistakes become a learning experience and something to be valued.

Error management puts mistakes and failures in a positive light and removes the stigma or shame surrounding them. As a result, individuals are more comfortable pointing them out and less likely to try to cover them up, meaning their negative impact is reduced or even mitigated entirely.

This also means that mistakes can be controlled and are not repeated, because when mistakes are welcomed and seen as educational and valuable, people are more comfortable discussing them.


At Facebook, in its early, adolescent days of breakneck growth, the social media giant's approach was summed up in the unofficial motto "Move fast and break things". The mantra came to embody the disruptive, freewheeling approach of Silicon Valley in general - what mattered was new products, even if they didn't work entirely perfectly.

More recently though, even Facebook has grown up. From "Move fast and break things" it evolved to the more pragmatic (and shareholder-friendly) "Move fast with stable infra" - in other words, making sure things work as they are supposed to.

Certainly a company like Facebook with billions in reserves can better afford to take more risks than a zero-profit start-up. But the approach and mindset has lessons for businesses of any size.

Nurturing a culture of error management means educating people that errors can be managed positively. It means seeing limits to an individual's current knowledge and a desire to learn and explore as attributes that should be welcomed and praised.

Making mistakes is part and parcel of pushing ourselves into new situations that can be explored and where real innovation can take place. With this kind of mindset, individuals and entire businesses learn to cope with errors quickly and the negative consequences can be stopped or controlled. For example, think of how a quick "I am sorry" said soon after a mistake is made is much more impactful than saying it a month later.


On the other hand, a conscious effort to avoid errors inherently reduces the area into which we allow ourselves to venture. By restricting our exploration space to only "safe" and familiar areas we are comfortable with, we are cutting ourselves off from the opportunity to innovate.

Similarly, if mistakes and errors are not openly communicated, we deprive ourselves of opportunities to learn and poor, perhaps even dangerous, decisions will follow.

In 1986, the world's worst nuclear accident occurred at the Chernobyl power plant in Ukraine. It was the result of a cascade of errors that began with a few small mistakes. Likewise, many of the world's deadliest air crashes have been blamed on similar chain reactions, where an initial, minor error was not quickly addressed, leading to further and increasingly serious mistakes.

If one does not communicate mistakes because one is afraid to show failure, such a chain reaction is more likely to appear. But with an effective, open error management culture in place, small mistakes can be prevented from snowballing into larger and potentially disastrous ones.

In today's tech-driven, VUCA world, organisations and economies that will thrive are the ones that do not fear exploring new things and have the confidence to exploit or take advantage of the innovations that arise. The ones that discourage people from making mistakes and learning from them will be outsmarted.

A culture of being welcoming and open to mistakes can be compatible with one that values stability and control. It is time for a new kind of kiasu mentality to emerge.

The writer is head of the Department of Management and Organisation at National University of Singapore (NUS) Business School.

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