01.2021 Leader's Remarks
2020 Far Eastern Group Annual Strategy Meeting Chairman’s Message--Breakthrough with Action Winning over New Norm
Far Eastern Group / Douglas Hsu
Each year, Chairman’s Message is a highlight of the Group’s Annual Strategy Meeting. With the topic of “Breakthrough with Action Winning over New Norm” this year, Chairman Douglas Hsu touched upon issues caused by Covid-19 such as: What is New Norm? How to Explore New Opportunities? How to Strengthen Corporate Image? So to “Win the New Norm, and Build New FEG in order to continue to thrive.
New Opportunities in New Economy
Facing with dynamic changes of the external environment, each company should plan development strategies, proactively explore new opportunities; for example: Far EasTone Telecommunications strives for new economy in 5G landscape, dedicates to developing various applications; Amart Taichung Shuinan Store opened to explore new market; Far Eastern International Bank converges the Group’s payment ecosystem to create Far Eastern Life Circle; U-Ming Marine Transport leads in building eco-efficient fleet; Yuan Ze University and Far Eastern Memorial Hospital join forces to establish Medical and Nursing School to cultivate top medical talent; and propose green energy initiative to stay with the new energy development trend.
Problems Caused by Covid-19
While the Group is committed to industrial deployments, the unexpected Coronavirus pandemic has disrupted the original planning, and brought tremendous impact to the year in 2020. Each nation has been imposing border control, which caused the shutdown of traveling; people have to maintain social distancing and large gathering is temporarily banned, seriously affecting the leisure industry. Future development would depend on whether the pandemic could be successfully contained, and if the counter measures were taking effect. Among which, vaccine is the global focus, currently there are already 12 vaccines in phase 3 testing, hopefully to relief the threat of COVID-19 eventually. And the U. S President-elect, Joe Biden, is expected to strengthen the epidemic prevention measures, and resume international collaborations to expedite the world’s recovery’s escaping away upon resuming his post.
The past economic crisis used to impose damage on the production side, this Coronavirus pandemic is the world’s first recession that has directly impacted on service sectors, the level of impact will need to be accessed. Yet it is worth noting that COVID-19 may be the only first wave of tsunami following by hardships in economic recession and climate change. Just as Albert Einstein stated: “You can’t use an old map to explore a new world.” Must have new thinking to face with new changes, and the new normal.
What is New Norm Post-Pandemic
As each nation has been imposing lockdown and social distancing to limit contacts, consumption has shifted to digital channel swiftly, leading into the verge of bankruptcy of physical retail operators. Many physical activities have turned into online, therefore opened up new business opportunities of contactless economy. At the same time, given the interference of China-U.S. trade war, coupled with structural change in China’s economy, many multi-national enterprises adjusted their supply chain deployment, not only “shifting out of China” but also repositioning to “globalized” production into “localized” or “regionalized” production to lower operation risks.
While the economy and life have been seriously affected by this pandemic, the world’s air quality is greatly improved. Carbon dioxide emission decreased by 6%, blue sky reappear in the originally highly polluted cities. Many surprisingly find themselves returning to the natural beauty of environment, and the world is more focused on the environmental issues.
Winning the New Norm
Facing with the new norm post-pandemic, all enterprises have to think what are the changes that will most affect the company, how to respond to them? How to establish a more agile, more flexible, and sustainable operating model so as to win the new norm.
According to Jeff Bezos, CEO of Amazon, “There is no alternative to digital transformation. Visionary companies will carve out new strategic options for themselves—those that don’t adapt, will fail.”
I also consider digital transformation to be the trend. All enterprises have to expedite their digitization, leaders should be personally involved in planning and executing. For instance, physical retail stores can apply AI to optimize customer experience, and create new value and market differentiation via digital business to drive revenue growth. For the manufacturing industry, through the promotion of Industry 4.0, operating efficiency can be elevated to increase value at the production end.
Also, enterprises must find adequate development targets, establish connected brand and vision. Only with clear objective, a powerful vision can be set up; otherwise, it will be difficult to move forward just like sailing on the desert floor.
Strengthen Corporate Image
After the outbreak of the pandemic, the Group has been acting proactively and collaborating across Group companies, not only illustrating agility, but also elevating our corporate image in the minds of employees and the public. Internally, the Group convoked emergency meetings to set up epidemic prevention policies, and initiated mask distribution plans to protect employee’s safety; each company also implemented epidemic prevention measures to lessen the impact on operations. Externally, Wuhan Yaxin and Wuhan Yatung Cement Companies provided the cement in a timely manner for the construction of Lei Shen Shan Hospital and Huo Shen Shan Hospital to offer its support to Wuhan; Hubei Yatung, Huangkang Yatung Cement also donated RMB 6 million to sponsor local government’s epidemic prevention; Y. Z. Hsu Memorial Foundation presented “Y. Z. Science Contribution Award” to Minister of Health and Welfare Chen Shih-chung and donated 6 million dollars’ worth of mask materials, to strengthen the counter epidemic resources for the Ministry; Far Eastern Memorial Hospital also proactively helped our friendly nation Belize to solve their needs for equipment and consumable materials. Being the world’s largest supplier of PE/PP and PE/PET, Far Eastern New Century also complied with government allocation to supply mask material, and developed brand new micro fiber for the middle filtration layer to elevate protection function of the mask; Everest Textile designed and produced cloth masks which were ranked top by the Wall Street Journal in the U. S., demonstrating Taiwan’s leading position in pandemic prevention and textile technologies globally.
In addition to its success of pandemic prevention, the Far Eastern Group is also well recognized for its sustainable efforts. Far Eastern New Century was awarded the first prize in “Dedicated to Circular Economy and Pursuing in Sustainable Growth” by the Global Views Monthly’s CSR Award; Far EasTone Telecommunications was Taiwan’s first telecom operator to receive the Insight Award by Glean Energy Ministerial of the United Nations, and was awarded as Taiwan’s first National Environmental Award to recognize its innovative energy conservation technology and comprehensive management system; Far Eastern Department Stores, Far Eastern SOGO Department Stores, Hsinchu Big City Shopping Mall, and Asia Cement Corporation received 5 Asia Responsible Enterprise Awards; Far Eastern Group won total 32 awards in the 2020 GCSA and TCSA, awarded as the first recipient in Taiwan again. Furthermore, Chairman Douglas Hsu was awarded “Taiwan Top 100 Best-Performing CEOs” by Harvard Business Review to recognize his outstanding leadership of Far EasTone Telecommunications and U-Ming Marine Transport.
Build New FEG that can Thrive Continuously
To adapt to the dynamic changing market, enterprises should consistently pivot to the new core. Firstly, find out what are “the Old” core products and services that have already peaked in growth, what are “the Now” core products and services that have matured, and what are “the New” emerging businesses, then use the new technologies to relaunch the stagnant old products, thus able to create more revenues with core products, and develop new products and services with this incremental capital to move toward to the next new opportunities from the existing successful businesses. The key to success depends on continuously renovating 3 core assets – Innovation, Finance, and People.
With limited resources, each company should concentrate on its niche market, or target high growth businesses, and renew the mindset of business operations. Firstly “Reimagine” how to maintain clean air and environment and enrich communities when developing businesses; secondly, “Repurpose” business to create maximum value not only for shareholders, but also for stakeholders; finally, “Reinvent” to develop and apply green materials to build new green supply chains and green processes.
Far Eastern Group is marching toward its 72 years milestone since its inception, the overall structure, strategy, and human resource policies all need to be reshaped. Different designs should be made for the top management and at each company level. The management system should be vertically connected and break the silos across horizons to expand synergy and adjust to the “New Norm, Accelerate Digital, Define Yourself, Focus on Core Business, and Create both Business and Societal Value,” so as to build the new FEG that can thrive and win in the future.