SINGAPORE: He calls himself “Kenny the fish”. As CEO of integrated ornamental fish service provider Qian Hu, Kenny Yap has been the face of his family business for decades.
His family first owned a pig farming business; but with its eventual phasing out, the Yap family adapted. With existing infrastructure, they started breeding guppies. First introduced as a means of mosquito control, further creativity and innovation led to the development of the more colourful and commercial varieties now known the world over.
Their challenges came early, with floods in the late ’80s. But the family bounced back then and several times after. With challenging times now for his company and industry, Yap’s eyes are on bouncing back yet again.
He went “On the Record” with Bharati Jagdish about innovation, challenges for Singapore businesses, values and life lessons. They started first with the origins of the family business.
Kenny Yap: Actually, deep down inside, I really like fish. When I was young, I had a chance to play with fish, and slowly I got to like fish. I still remember, at the age of five or six, I bought a goldfish with 50 cents – big money to a poor kid. The goldfish was deformed, with a broken tail, but I kind of liked it.
My brother laughed at me, but I didn’t give a damn, and I continued to take care of the fish. Eventually, I gave good fish a definition – it’s whatever kind of fish, as long as you like it, it’s a good fish. At a very young age, I defined beauty by my own standards.
Bharati Jagdish: After you graduated, you worked in a bank, but after only three months, you realised that you didn’t want to work for a large corporation because you did not like to conform to a set of rules.
Kenny Yap: I decided that I need freedom to think. I need to define the name of the game. I cannot work in the structures that you have already defined for me. I need this kind of freedom.
SHAREHOLDER PRESSURE AND BEING NUMBER ONE
Bharati Jagdish: There was a point in the business where you made a huge mistake and almost lost it. You invested money in raising high-fin loaches, each one costing S$100 to S$200. But you had to move your premises and the move ended up killing all these very sensitive fish, resulting in huge losses.
You bounced back and you’ve said before that it was your family’s reputation that allowed you to borrow money and keep the business afloat. You also diversified the business then.
However, at this point, you’ve seen several quarters of losses, although based on your latest annual report, your business is in the black. But several quarters of losses, share prices not really going up. There have been questions about the real success of your business. What’s going wrong?
Kenny Yap: Actually, we just had our Annual General Meeting and one of the disgruntled shareholders said: “Yeah, your business was not doing well for the past few years, but we still continue to see you do interviews with people, talking about the business.”
Shareholders don’t know that sometimes there are problems because of the business cycle. But it doesn’t mean that this business is not sustainable. Having an eroded profit for a few years does not mean that this business cannot last beyond a generation. It’s just that as a listed company in the stock market, most of the investors, I can guarantee, they only want short-term results.
They don’t care about whether this business can last beyond a generation, because they can always sell the shares. But those people who created the company, we have a passion. So sometimes, when people don’t understand our intention, and we have done a lot of things behind the scenes, but they say we do nothing, I get a little bit heated up, which is not right, but this is my character. After all, I’m a human being.
Bharati Jagdish: At the end of the day, passion doesn’t really pay the bills. You understand why people would ask questions like that, right?
Kenny Yap: I think one of the major reasons is because of the Arowana. Last time, this business was very, very lucrative. High profit margins. The entry barrier was extremely high. You needed millions of dollars in order to get the stocks and breed dragon fish.
However, in the past four to five years – because of special circumstances in Malaysia where they have cheap credit – many, many investors went into dragon fish breeding programmes. In the 20 years before this period, we saw maybe just one new fish farm within one or two years. But for the past four or five years, within a year, you could see 200 to 300 farms. The speed of setting up the farms, and the speed of supply actually was overwhelming. So that made fish prices come down quite a bit.
And then the other reason. We export to 80 countries around the world. It’s a very resilient business, very good business. However, a prolonged period of uncertainties in certain countries, for example, in the European continent, has subdued certain types of consumption. So we also face pressure from that.
Today we are still the biggest exporter to Russia, but Russia sometimes has problems with the US, or problems with oil, and then their currency depreciated. So there are many things that happened all at the same time in the past few years.
Bharati Jagdish: Do you regret listing your company? The pressure from the shareholders must get to you.
Kenny Yap: I don’t regret it. I am quite used to shareholder pressure. We try to be as transparent as possible so that most of the shareholders’ questions are addressed in our annual report. My family is the biggest shareholder so that helps.
Bharati Jagdish: What are your plans to deal with all of this now?
Kenny Yap: I think eventually, Qian Hu will still become the world’s number one exporter of fish. There is no doubt about it.
Bharati Jagdish: Why no doubt?
Kenny Yap: Because these four countries supply 60 to 70 per cent of ornamental fish to the world market: Indonesia, Thailand, Malaysia and Singapore. We just set up in Indonesia, about one or two years ago. So, if we can be one of the top three exporters in these four countries, where none of my competitors have these kinds of operations, we’ll be the world number one eventually for sure.
INNOVATION AND INVESTING FOR THE FUTURE
Bharati Jagdish: But now, with the world changing so fast, will this logic hold?
Kenny Yap: We continue to invest a lot of money in our R&D, and we have a good filtration system, which is a very different kind of concept of filtering the water. When you filter water, usually, you take out all the good and bad things.
But with the hydra-technology system, we keep the things that you want and we reduce the things that you don’t want by altering the current. For example, if I want to retain a certain mineral, but I don’t want ammonia, I can play with the current of our electrolytes.
So this is a fantastic way to actually make the whole living environment for the fish better. We have that. We invested a lot. We invest for the future. It can be millions of dollars a year.
If I am a very short-sighted kind of CEO, I would try to save all the R&D money. Then, our profits will be nice, right? But if I do that, I will kill my future.
So there are a lot of things we do behind the scenes that have not matured enough to show the public. But this means that people always look at our results and think: “Oh, yeah, yeah, you still do interviews and talk about the business, but don’t give me any results.”
Within the next few years, we’re also trying to find another one or two pillars of growth. So we have a certain pilot project pertaining to aqua culture. But, it’s not mature yet. I do not have any data to show, so I can’t comment much, but we are trying to look for new pillars of growth to create new value for the future.
Bharati Jagdish: Well, this brings me to my next point. The culture of innovation, a lot of people say, is lacking in Singapore. Now especially, with a lot of SMEs struggling under high business costs and lack of manpower, there’s a big push by the Government to try and help companies innovate. But many businesspeople have been quoted as saying that innovation will take time, do we have the time, do we have the energy, the know-how, the resources to do this.
Kenny Yap: Any enterprise that does not embrace innovation, especially in Singapore, will not survive in the next three to five years. I guarantee you that.
It’s simply because the differentiation that a company has to have must be so great to differentiate itself in order to compete and only innovations can do that. You cannot do incremental improvements like redesign the packaging without thinking about the technology of the product. You can’t do incremental value-add.
You must actually create new value, not just add value. Only innovation can do that. Only if you come up with your own proprietary formula or technology, then you make a product that can create greater impact to the industry. Then you can survive.
ACCEPTING FAILURE
Bharati Jagdish: How to be continually innovative – to get people to invest now so that they can last in the long-term?
Kenny Yap: It’s a culture that you have to build within the corporation. First of all, you must encourage your people to try. But, if you want to encourage your people to try, you must accept them making mistakes.
“I think more and more people realise that it’s through making mistakes that we learn things.” CEO of integrated ornamental fish service provider, Qian Hu Corporation Limited, Kenny Yap goes “On the Record” with Bharati Jagdish about why we need to become accepting of failure, why his own profits have been far from sterling in the last few years and whether Singaporeans need tough love to survive. Catch the full interview on Friday at 7:30am and 2:30pm. #OnTheRecord
Posted by 938LIVE on Thursday, March 31, 2016
I like people to make mistakes because they can learn from the mistake. But I do not like people to make stupid mistakes, which I define as making the same mistake twice. That’s stupid. I hate that, because it means they have not learnt from their mistake.
So, if you can have a culture of a lot of people making mistakes with the intention of learning, you have to encourage them. You cannot punish them.
You have to also tell them that: “Okay, our survival depends on us coming up with new things or coming up with new ways of doing the same thing.” You must always stress this kind of concept to the whole organisation in order for them to say that: “Okay, if we do not act, we will die.”
Bharati Jagdish: What if a staff member of yours makes a mistake that costs you millions of dollars? How do you deal with that?
Kenny Yap: That has not happened. But if the intention is to create new values for the company, but the execution was bad, we have to learn something from the whole process. If it’s not an ill-intentioned, hidden agenda kind of thing, we have to accept that.
Bharati Jagdish: You wouldn’t fire him or her?
Kenny Yap: No! I might promote him or her to Chief of the Innovation Department because people who make mistakes usually have the guts to try new things. People who are very clean do nothing new. They maintain the status quo and try to avoid mistakes. But they are not the kind of people that an innovative organisation needs in the future.
Bharati Jagdish: What do you think has shaped your thinking about this?
Kenny Yap: Because I made a hell of a lot of mistakes along the way. The mistakes become your experience, and with a lot of experience, eventually you’ll be a wise businessman. It’s with the mistakes, with a lot of experiences, that you can become wise men.
Plus, I like to mix around with all kinds of people, people not within my trade. I have many close friends from many industries. I like to mix around with them because, from what they say, you can actually open up your mind. You can look at the things from different perspectives. So a vast network of people to mingle with also shapes who I am.
And the other thing is, I like to talk to optimistic people – the realistic, pragmatic kind of optimism. I refuse to talk to people who have negative feelings, because they make me sad and unhappy. There is a group of people, in all societies, who only like to complain. They get jealous, and other people’s success makes them very, very unhappy. And they never really think about how they can change their lives. They hope that other people fail, so that they can be happy. I refuse to mingle with this group of people.
Bharati Jagdish: What made you be accepting of failure – your own and that of others?
Kenny Yap: I always say that I’m a farmer, so I can make mistakes. I’m not a high-class Harvard graduate type of person. I can make mistakes, because I’m a farmer. What do you expect from a farmer? Normal people make mistakes. The point is, no matter who you are, even if you are a Harvard grad, allow yourself the freedom to make mistakes, and if you can laugh at yourself, I think you truly can achieve happiness.
If you always hold on to a certain kind of status, telling yourself you must behave in a particular manner in particular situations, then you become different people in different situations. You lose yourself.
Bharati Jagdish: Why do you think we still seem to have a huge aversion to failure in Singapore?
Kenny Yap: If you look at history, we have a certain kind of burden from before. Last time, the cost of making a mistake was so huge that our politicians must always do the right thing, because the consequences of doing the wrong thing was so huge. So people got punished like hell when they did something wrong.
We had this culture of: “Everybody must be perfect. You must be so damn smart. You must always do the right thing.”
We must move away from the culture of always doing the right thing. This takes a while to dilute. I think more and more people realise that it’s through making mistakes that we learn things, and disruptive technology or innovations always come through making mistakes.
Last time, even in the Singapore economy as a whole, we didn’t have to invent anything. We just copied. But right now, because the whole situation changed, we must invent things.
Last time, you just needed to add value. Now, you have to create new value which even other countries do not have. We have come to a point where it is a very different kind of business environment.
GOVERNMENT HELP
Bharati Jagdish: What do you think of the measures that have been unveiled for businesses in Singapore in the latest Budget statement? Anything stand out to you?
Kenny Yap: Yeah, I think the new Finance Minister is trying to balance the short term and the long term. I’m glad that the Government emphasised a lot on SMEs, because SMEs are the biggest employers of Singaporeans, so we need to help them.
We need to give them assistance to transform, to innovate. I don’t really like that the Government continues to push a certain kind of levy, because some sectors, no matter how high the levy, we still cannot employ Singaporeans and we still have to employ foreigners.
I always give priority to Singaporeans, but some of the sectors, because of shift work or hard work, they will not enter. They have a lot of choices. We are at almost a full employment situation.
Bharati Jagdish: You, at one point, faced a manpower issue, but you innovated and made it work. So why shouldn’t other businesses be expected to do the same?
Kenny Yap: Okay, some of the SMEs … because of old habits.
Bharati Jagdish: So shouldn’t they be weaned off these habits?
Kenny Yap: Some of them want to improve and innovate, but because of their size and cashflow problems, they find it quite difficult. So there are many, many issues facing SMEs.
Of course the Government might have to look at more customised solutions rather than a single project. I know it’s very difficult, so it takes very good civil servants to go to the ground and understand and try to see how they can help. When it comes to Singapore SMEs, you can argue from two sides, that if you are a good businessman, you will be proactive and you will do all kinds of things and you will be resourceful.
Singapore businessmen are not independent and innovative because “we have not had (an) environment to be free.” CEO of integrated ornamental fish service provider, Qian Hu Corporation Limited, Kenny Yap goes “On the Record” with Bharati Jagdish about how businesses can transform, why his own business’s profits have been far from sterling in the last few years, and whether Singaporeans need tough love to survive. Catch the full interview on Friday at 7:30am and 2:30pm. #OnTheRecord
Posted by 938LIVE on Thursday, March 31, 2016
But sometimes it’s not their fault, it’s because our Government created an environment that made them so. Made them less creative. You built submissive enterprises. You built and you asked us to listen to you. We have to be subjected to your rules. So of course, right now, you have to come and guide us through this phase. We have not had the freedom in this environment to be free anyway. You built the country like that and I didn’t have a chance to be creative, now you have to help me become a more innovative kind of enterprise.
Bharati Jagdish: So you’re blaming the Government for the lack of creativity in business?
Kenny Yap: No, that was in the past – 10 or 20 years ago. Most of the businesspeople will just listen, and then just carry out whatever they are being instructed. So, certain enterprises, if the bosses are relatively old, of course they will not want to do anything. They will expect the Government to give them instructions to transform.
But again, the other school of thought would be, if you are a good businessman, you will always be resourceful, and you will always be proactive.
Bharati Jagdish: While some businesspeople say that the Government should do more to help, I’ve had other businesspeople tell me that if Singapore businesspeople were to go to any other country independently, they will probably not survive. Because here, they are spoilt by Government help. Is it time perhaps for more tough love so that the new generation of entrepreneurs will be more resourceful?
Kenny Yap: Yes, I’ve heard that as well. But the sad thing in Singapore is that businesses here really do need help.
Bharati Jagdish: But wouldn’t more and more Government help just breed a sense of entitlement? What do you think – more tough love that encourages independence and creativity?
Kenny Yap: I’m more afraid of ordinary Singaporeans becoming more entitled. I’m never afraid of SMEs having a sense of entitlement because, if you’re in business, you usually do not have this kind of mentality. Only individuals always seem to expect the Government to help them in whatever things that they cannot do. Business owners don’t usually behave in such a manner, but ordinary Singaporeans, maybe…
Bharati Jagdish: What makes you say business owners don’t behave in such a manner?
Kenny Yap: Because of the fact that they had the guts to create something from nothing. At some point, use their own money to take a loan. They are willing to take on the opportunity costs of doing a business, to possibly face bankruptcy.
So the sense of entitlement among businesspeople is less compared to individuals who have nothing to lose, but always expect somebody to give him or her something.
MORE TOUGH LOVE AND TEACHING VALUES
Bharati Jagdish: Would you be willing to pay more in terms of taxes to fund other Singaporeans’ social needs in the future?
Kenny Yap: You always have to get money from somewhere, so there must be a certain kind of balance. I do not mind at all helping our old people. I do not mind helping the less fortunate, (the bottom) 20 to 25 per cent. But I mind the middle class still continuing to ask a lot from the Government because of their wants rather than needs. That is very dangerous.
You can live in a pretty nice 4-room flat, but because you want to have a condo, I have to find a way to help you own a condo. That is something that I don’t agree with.
We should continue creating an environment where everybody has opportunities to try, but don’t continue to give money simply because they have wants. The middle class can continue to move up, but they must also put in effort themselves.
Bharati Jagdish: I understand that your dad wanted you to put in effort as well. You said once that your dad loaned you money for your education expecting you to return the money with interest, instead of simply giving you the money.
Kenny Yap: He said I had to return the money with 15 per cent interest. When he said this to me, I was quite angry, because I thought all parents are supposed to pay for their children’s higher education. But my dad said that that was the money for his retirement, because my family wasn’t that well off.
When I came back, he didn’t actually ask for the money. But I eventually paid him more than 10 times what he loaned me. I think what my dad tried to tell me is: Treasure your studies.
Don’t go there and “play, play”, because I bet on you and you mustn’t disappoint me.
So, I think my father was a very wise man. I think he understood what tough love is.
Many Singaporean parents lack this. Whatever the children want, they will give them, without conditions.
Bharati Jagdish: What do you think has made us like this?
Kenny Yap: Because we lack confidence that our children will love us.
Bharati Jagdish: Insecurity.
Kenny Yap: A lot of parents feel that if they do not give the children the things they want, they will not be loved. They treat love as a transaction, rather than a duty or a very natural thing. My father was not afraid that I was angry because he saw it as me being immature.
People compare things. One of the things that make people very unhappy and is comparing themselves to the wrong person. They don’t appreciate what they have.
Their identity seems to be defined by what they see around them, comparing wealth, comparing how many trips they can take their children on, clothing, shoes. They forget the most important thing to educate their children on is values. We should emphasise values now, rather than academic results.
My father told me: “Before you run a business, know how to be a human. Because if you do not know how to be a human, your business usually will fail. But even if the business is very successful, you’ll do more harm than good.”
Parents should give basic things to their children, but don’t give them luxurious things because once they get accustomed to it, they won’t be able to go back. The most important thing is teach them is how to be a kind person. Because kindness is something that is so lacking right now in our society.
I want Singaporeans to respect people. This is lacking today. When we were young, whenever we saw an elderly person on the bus, we would just give up our seats. We didn’t need any reserve seating.
If it were up to me, I would make sure all the schools make Moral Education a bigger KPI than Mathematics or Science.
Bharati Jagdish: Some people might say, “Kenny, who are you to talk about these things. You don’t even have children of your own. You’re not even married.”
Kenny Yap: It doesn’t mean that I do not have my own children, I do not have a family. My nephews, my nieces, even their children, they are part of my family.
Bharati Jagdish: Why haven’t you been married?
Kenny Yap: First of all, initially, I travelled a lot. It wouldn’t have been fair to my wife. The other thing is I think I’m a male chauvinist. I like very, very intelligent women. But the woman must know that when I travel, don’t expect me to call you very often, and you shouldn’t call me to disturb me. I like my own freedom. Right now, I do not want to have children because of my age. I’m in my 50s and if I pass away early, it wouldn’t be fair to my child. I think getting a partner is a better choice.
If I can find somebody to live together, then we just live together. Marriage is just a piece of paper, so after you pass a certain age, it’s not about getting married, it’s about getting a partner.
Bharati Jagdish: Okay, so you’re still looking?
Kenny Yap: If you stop looking for love, you have lost something in your life. So you must always continue to look for love and hopefully, you can have a partner that you can go through the last phase of your life with. I don’t actively look. If it happens, it happens.
Bharati Jagdish: In spite of the fact that your business has taken some losses in recent years, you’re still doing relatively well compared to many Singaporeans. Coming from a pig farm and a relatively poor background, how do you view money today since you have much more than before?
Kenny Yap: You know, except for my car, I think none of the things that I own are luxurious. I wear very simple shoes, clothing. Most of my clothing, I buy in Thailand and in China. I have the experience of going to high-end restaurants, but maybe because of my upbringing, I still like to go to hawker centres. I like to drink beer with the workers rather than mingle with politicians or some CEOs. I have not built up any habit of enjoying very luxurious things.
Bharati Jagdish: So why do you do all this? If not for money, then what?
Kenny Yap: You know, only until recently, when we talk about retirement and then start looking at CPF savings, then I started thinking about money. Last time I had no time to think about money. The only thing I thought about was how to run the business. Not only now, but to build a business that will be able to last beyond my generation. Those are the things that preoccupy me rather than how much money is in my bank.
THAT ONE MISTAKE…
Bharati Jagdish: Just one last thing. Famous people like you, whenever you make a mistake, it becomes a headline.
Kenny Yap: Right.
Bharati Jagdish: And recently, you were in the news, because you got caught driving drunk, and I believe your license was suspended for some time?
Kenny Yap: Yes, yes.
Bharati Jagdish: What happened there? What happened that day?
Kenny Yap: That was a lapse of judgement, and I made a mistake, so I have to pay the price. It was New Year’s Day celebrations and I was about to leave after a few drinks, but I ran into friends whom I have not seen for many, many years.
I exceeded my limit and I still could have asked somebody to come in and pick me up, but I did not.
So, I made a mistake. Getting caught is good for me, to just remind me that I have to be more responsible.
Bharati Jagdish: Because lives could have been lost.
Kenny Yap: Yes. I accept my punishment. Once is enough. I cannot imagine that I would repeat this. I’d be stupid to.
Bharati Jagdish: You obviously enjoy the limelight, but because you are who you are, when something like that goes public, people end up talking about it on Facebook for at least one or two days. How do you feel about this aspect of the limelight?
Kenny Yap: I went to different media for interviews when I started in the business. It was more to talk about the industry because I always have the idea that if I can raise the profile of the industry, my family business, Qian Hu’s profile will be lifted accordingly. It is very natural that when you expose yourself too much, people will look at you quite differently. And you also have to accept the fact that sometimes, people will look at your mistakes more seriously than other people’s mistakes.
Bharati Jagdish: Considering your character though, do you feel embarrassed at all?
Kenny Yap: I feel sorry about the things I do. But I don’t feel embarrassed, because I don’t care about those people, whom I do not know or care about, criticising me. I’m only responsible for the things that I’ve done, and then I have to move on.
Embrace innovation or die: Kenny Yap, CEO of Qian Hu
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