Week in Review: CGP, a government funded intervention that hits the sweet spot

  • Cohort 4 proves CGP method industry agnostic due to business driven approach
  • SMEs that have high computerisation struggle to cross chasm to digitalisation

RENUKA Sena, CEO of Malaysian-based Proficeo Sdn Bhd was nervous at the beginning of the fourth cohort of the Coach & Grow Programme (CGP), a year-long mentorship programme designed to help companies accelerate growth and equip their leadership teams with the right tools and guidance.

While the first three cohorts were all technology based companies, this time about 15% were Brick & Mortar (B&M) companies and Renuka was not sure if the CGP method of coaching would work with a bunch of none tech entrepreneurs.

However the B&M entrepreneurs all shared the same desire in that they were looking to see how they could adopt technology to improve efficiency and be operationally savvy. That hunger to improve using technology was enough to make up for any tech savviness they lacked. That and the fact that any technology solutions that are introduced to the CGP companies are driven by business needs and not technology has given Renuka the confidence to say, “we are now sure our CGP method is industry agnostic because of our business driven approach. Companies joining us can be both tech-based or non-tech based.”

That’s good news for the rougly 350 companies that have already registered their interest to be part of Cohort Five. While there is no news yet on whether the government will again fund the CGP, which I consider to be the most effective government supported C-level intervention programme in Southeast Asia, those who have gone through it have no doubts about its impact.

Consider Zeehan Zahari who came back to Malaysia with her husband, four years ago to open a restaurant. With her husband as the chef, Zeehan handled the business side of operations but struggled to get a better handle on things, especially in trying to better understand their customers.

“Two years ago, I wanted to do more around data to better understand our customers so that we could reward them based on their habits.” Adopting a loyalty system, she was blown away by what could be done. But something was still missing.

The husband and wife had no one they could talk to about the business side of things and that’s when Zeehan was introduced to CGP and got accepted to Cohort 4. “We wanted to do things right and not test anymore. We wanted to speak to someone who had experience.” She got that, and more.

Describing her experience as “fantastic” what Zeehan didn’t expect to find was an entire ecosystem of entrepreneurs ready to help each other. Describing her learning curve as steep, “I did a lot of growing up in the programme and have changed both personally and professionally,” she tells me. “I really feel strongly about it and hope the programme can continue.”

Then there is Nicholas Gan and his father who have a forklift business. Launching it in 2002, they hit US$240,000 (RM1 million) revenue in that first year. It was too much of a good thing and they got comfortable – for 14 years!

Realizing the business was underachieving its potential, two years ago Gan wanted to make some changes, using technology, but came up against the immovable wall “that’s not how things are done in this sector”. Getting accepted into Cohort 4 last September, Gan was all gung-ho, itching to get support for his ideas on using technology to spark a sector stuck in the old ways.

Except that Gan was taken aback when his coaches disagreed with him. “I was thinking, who are they to tell me what can or cannot work in a market I know so well,” he tells me. Well, 12 months later those same coaches, according to Gan, “are fantastic”, having helped him see that his foundation was not good enough to go change his sector using technology.

Thanks to the CGP Gan is now more focused and structured around using data to make more informed decisions. “I’m not like a cowboy anymore, going with where the wind is blowing today.” Technology is still on the radar for him but it is the third step not the first.

I loved talking to both Zeehan and Gan because they show what B&M businesses can achieve when the entrepreneurs are hungry to grow and realise that technology can help them. And if they are fortunate enough, there is CGP and the community it has built since Cohort 1 in 2011, to guide them and be with them along their journey. And that’s what Malaysia needs.

And while the CGP does not position itself as being SME focused, the reality is that almost all of its 469 alumni are SMEs, making it a powerful catalyst for greater technology and digital adoption.

The need is pressing. A Sept 2018 Word Bank Report on Malaysia’s Digital Economy revealed that only 61% of business establishments are connected to the internet, 46% have fixed broadband, and only 28% have a web presence of some kind.

Also in Sept, SME Corp Malaysia, in its 2017/2018 annual report, revealed data from the Malaysia Digital SME Study it conducted jointly with Huawei Technologies (M) Sdn Bhd.

Providing more detailed data points as compared to the high level view taken by the World Bank, the report, compiled from 2,033 SMEs reveals that presently, ICT usage among SMEs predominantly comes from personal devices, such as smartphone (91.4%), basic internet connection (90.1%) and computer or laptop (86.5%). The usage of back-end business processes, such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are very low however.

A key conclusion is that SMEs have achieved high computerisation but struggle to cross the chasm to digitalisation that could significantly enhance business and productivity gains.

With the consistently poor adoption of technology by SMEs, and with the Malaysian government trying hard to strengthen the capabilities and competitiveness of its SMEs, the CGP, a programme funded by the Ministry of Finance, through Cradle Fund Sdn Bhd really hits a sweet spot.   

And with that, I hope you had a restful weekend and here’s to a productive week ahead.

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