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21 August 2023
How a large conglomerate in the Philippines is redefining business transformation, and why Australian leaders need to pay attention
When you think of successful corporate transformation, a 100-year-old family business in the Philippines may not be the first thing that comes to mind.
Yet, Aboitiz, a large and long-standing Filipino conglomerate, is undergoing a remarkable transformation that's turning heads worldwide.
With ground-breaking, sustainable ventures and a focus on growing entrepreneurial, purpose-driven teams, Aboitiz is redefining the future of business transformation in ways that Australian leaders can no longer afford to ignore.
Cherie Mylordis, an Australian business transformation and innovation expert, has been working remotely with teams at Aboitiz to help them achieve their goals.
In this interview, Cherie shares one of the success stories she's recently been involved with at Aboitiz, giving us a glimpse into the incredible innovations that are taking place.
Cherie explains how, with one team’s bold new ideas and leadership support, Aboitiz is pushing the boundaries of what's possible — and why Australian leaders need to pay attention or risk falling behind.
Q: Tell us about Aboitiz. Who are they, and how are they innovating?
Aboitiz is a 100-year-old family business that's grown into a multi-billion-dollar conglomerate spanning food, power, banking, data and infrastructure. And now, Aboitiz is driving a remarkable transformation into the Philippines’ first Techglomerate and continues to advance business and communities for a better future.
Through the growth of team members, an entrepreneurial mindset and investment in innovation initiatives, Aboitiz is becoming a more advanced and purposeful organisation with employees who are both highly skilled and fulfilled.
They’re equipping their people to be internal innovators and entrepreneurs.
To do that, Chief Transformation Officer, Emilie Sydney-Smith (also Australian), established the Transformation Office, including a shared services team of highly skilled specialists, supported by a small team of global coaches to help get people thinking and working differently.
The goal is to make ourselves redundant. We inspire and equip current and emerging leaders to step up, embrace this new culture and take it forward.
Q: So you're one of the global coaches?
Yes, I am part of a small group of coaches from around the world. We come in on a project-by-project basis to work on specific activities like innovation bootcamps, master classes and workshops to drive and enable this incredible transformation.
Aboitiz is equipping its people to be internal innovators and entrepreneurs through their Great Transformation.
Q: It sounds inspiring. So one of the projects you’ve been working on is called Fresh Depot. Tell us about that project.
Fresh Depot came out of a three-month innovation bootcamp in early 2022. These bootcamps shift people's mindsets and teach them to think big about significant problems to be solved and innovative, scalable solutions.
One of the ideas from the bootcamp was to tackle the problem of farmers losing fresh produce in the Philippines because they don't have access to cold storage.
In the local farming areas, there's no cold storage available. Farmers lose up to 42% of their produce because it starts to perish before it can get to market.
Farmers in the Philippines live in poverty. They might only earn 10% of the value of the produce they sell. But if they could salvage the produce that’s going to waste, they could effectively double their earnings.
With close connections to farmers, we believe that reducing fresh produce wastage will help uplift farmers and make a huge difference to regional communities. We also want to see more local produce on Filipino tables so that we can be more self-sufficient as a country.
Lester Gimeno, Fresh Depot Project Co-Lead
The team’s big idea was to deploy portable, solar-powered cold storage units near the farms to increase the life of harvested crops. The executives at Aboitiz supported the idea and were keen for it to evolve into a new venture.
I started coaching this team in mid-2022. I've spent nearly a year with them, and within nine months, we started the pilot stage. With two units now in use, the venture is really taking shape.
Q: That's a short timeframe, just nine months from ideation to pilot. What sort of challenges have you and the team faced?
There are many challenges.
I work with a small team of passionate people who were in significant corporate roles in Aboitiz. They have excellent skills, but they'd never stood up a new venture before. They'd never developed a strategy for a new business venture, nor dealt with the senior people in the Department of Agriculture or the local government.
They had to figure out how to partner with other players to bring this technology to life to support these units. How do they find suitable units? How can they get the units into the country?
And that's where my coaching comes in.
I don't tell them what to do. I guide them. I give them advice and tips. Through brief daily huddles we work together to make sure there's clarity on priorities and responsibilities. We’re outcomes-driven, so we discuss how to approach activities, share insights and resolve issues in a collaborative manner. I support them so they can confidently step up and go after this exciting goal they've set for themselves.
And that's quite a change for people from corporate roles. They're shifting to something that's much more entrepreneurial and a lot riskier.
“Developing a venture as corporate entrepreneurs is uncharted territory for my teammates and I. There are many different roadblocks that we wouldn’t normally encounter if we stayed in our old corporate roles, ranging from our car getting stuck in the mud in the mountainous farms and civil works issues to tackling sophisticated cooling systems and massive stakeholder engagement efforts as a small team. It is extra challenging to do something in food or agriculture, where issues cut across countries. But we’re really fortunate that we are given the support, guidance, and tools needed to achieve our ambitious goals and make an impact in our local agriculture industry,” said Aly Virrey, Fresh Depot Project Co-Lead.
“Our motivation is to achieve our Massive Transformative Purpose of having Prosperous Farmers Feeding the Philippines, and as articulated in our tagline, ensuring that No Fresh Produce – or farmer’s effort – is wasted. That’s our north star and what keeps us going,” she added.
Innovation bootcamps shift participants' mindsets and teach them to think big about significant problems to be solved through innovative, scalable solutions.
Q: How do you support that change in mindset?
It is a big change. And it starts when the team goes through the innovation bootcamp. They embark on a journey of discovery. It's amazing, but it’s intense. They begin to think differently. And they can't return to the old ways once they've experienced better ways of working. They can’t unsee it.
They want to go after these big ideas. They want to solve big problems.
The coaching is a continuation. They're thinking like a startup founder. And they're asking how we start this new venture.
The great thing is that because a large organisation supports them, they have access to many internal resources. They can tap into dedicated shared services such as legal, procurement and finance that streamline and enable entrepreneurial work. That's quite different from a typical startup, where you must figure everything out yourself, and it shows the rest of the organisation that the sky doesn't fall in when ditching bureaucracy.
Q: You claim this is one of the best transformations anywhere in the world - why?
It’s a shift from work driven by top-down hierarchies and rigid job descriptions to work driven by purpose, co-design and collaboration that goes beyond organisational boundaries. As a global coaching team, we’re tapped into major corporate transformations happening around the world. We’re continually blown away by Aboitiz leadership's willingness to say "yes" to new ideas and the way their people passionately absorb new practices.
Q: How do you balance the need for this to be profitable with one of those key sustainability goals like food security?
This is a business, and it is about the commercial opportunity. The team had to develop a compelling pitch to get initial funding, followed by a road map to experiment and build a detailed business case for internal and external investors.
It's about having a compelling venture that stacks up on feasibility, viability and scalability to warrant the investment.
It must demonstrate a return on investment. Otherwise, nobody's going to be interested, and it won’t be sustainable.
Q: I know you're based in Australia. Are you seeing this kind of transformation program happening here?
Not so much. I see a lot of startups in Australia. Those startups start from someone's idea - it's a problem they want to solve. The founders work hard on their idea, and they might get funding to take it from a startup to a scale-up. There's a lot of that going on in Australia.
But I don't see many large Australian corporates wanting to take such bold, audacious moves. I see a lot of what I'd call innovation theatre and incremental change, but I don't see transformation programs that aim to achieve exponential impact.
I suspect some leaders in Australia might question whether you can generate 10x initiatives out of innovation bootcamps. But they work. They've been working all around the world. In Australia, we need to pay attention, or we really do risk getting left behind. Even more so now with the rapid changes in AI.
Q: What is the most important factor to drive this kind of successful innovation project that you've been undertaking for Aboitiz?
The most important thing by far is to have commitment and support from the top. If you don't have buy-in from the executive team, the corporate immune system will kick in and stifle transformational change. So it's crucial.
That means the CEO and the entire executive team must be on board. Sometimes they need to see it happening somewhere else to believe it. They might need to go and visit another organisation, maybe in another country, to see the proof and the results.
They must believe it. And then, they have to create the conditions for these initiatives to thrive.
Typically, someone within the executive team gets things going. At Aboitiz, its innovation mindset and the Great Transformation initiative itself are largely the brainchild of its Chief Executive Officer, Sabin Aboitiz. A fourth-generation Aboitiz, Sabin is the Great Transformation’s architect and visionary.
With his support, the Chief Transformation Officer, Emilie Sydney-Smith, is the crucial link to the executive team. She's the one who makes sure they remain engaged and on board.
And then it's about those executives nominating people to join this immersive innovation experience and take those insights back to their business unit.
It's a shift from work drive by top-down hierarchies and rigid job descriptions to work driven by purpose, co-design and collaboration that goes beyond organisational boundaries.
Q: What’s the key takeaway you want business leaders in Australia to get from hearing about the Aboitiz Great Transformation and Fresh Depot project in the Philippines?
If you stand up as a leader and create the right conditions, you can make the world a better place.
Your organisation has certain products or services that it offers. But do you have a purpose statement describing the impact your organisation strives to have on the world? And that's not about profit or satisfying shareholders. This statement is about something more significant.
If you have that bold and clear purpose, how are you bringing it to life with actions? Are people equipped and given space to make it happen? How might they deliver something well beyond what you do now to create a massive impact?
If you have an aspiration to achieve this as a leader, and if that's where your organisation is going, then you can absolutely put your teams through the same bootcamp-style approach.
People doing these bootcamps who have also done an MBA tell me that the bootcamps are a life-changing experience, far better than their MBA.
It's an immersive experience. People must commit at least 50% of their time to the bootcamp. But they need to have leadership support to do that. It’s vital.
Q: What happens at the bootcamp?
The bootcamp goes for around three months. It's intense. It has ups and downs. But there's a clear process.
At the start of each week, there's an assignment, and we coach the team through the process for each assignment.
At the end of the week, they must present what they've done to the head coach and other executive mentors or stakeholders.
Halfway through the bootcamp they present four big ideas to a panel of disruptors. If you've seen the show Shark Tank – it's a little like that.
The disruptors are people who understand big-thinking innovation.
As a result of the feedback from the disruptors and their own reflection, they cut down to two ideas.
In week 12, they pitch two solid, compelling, inspiring solutions to solve a big problem to their executive team. They seek leadership support to implement those ideas.
So it comes back to having that high-level business case and demonstrating that this problem is worth solving. At this point, the team has a bold, audacious and robust solution to take forward.
The great thing about this program is that teams get to dream big and create solutions to real problems through a disciplined process that delivers scalable solutions that really do advance business and communities.
Emilie Sydney-Smith, Chief Transformation Officer.
Q: How do innovation boot camps compare with other programs you’ve worked on?
In over 30 years of working on complex change, this is the best approach I’ve seen to rapidly shift culture, reinvigorate people with future-fit capabilities and generate ground-breaking ideas to solve big problems. The process draws on other contemporary disciplines, such as agile, design thinking and lean startup, in a unique way that delivers extraordinary outcomes.
Q: What are those future-fit capabilities?
I recently asked a panel of HR executives what kept them awake at night. They told me they were worried about how to equip their people with future-fit capabilities and how to lift performance.
The future-fit capabilities that need to be infused into your people's DNA are the ability to deal with uncertainty, an expanded worldview, collaboration, agility and a growth mindset.
If you have a future-fit workforce who are personally fulfilled, there's simply no stopping you.
Are you ready to do the best work of your life?
Cherie's leadership, transformation and coaching give current and emerging leaders the confidence to be courageous.
The Aboitiz Group’s Fresh Depot team launched its pilot modular cold storage units in Benguet in March and Nueva Vizcaya in May 2023. The units are powered by solar energy, each holding five metric tonnes of fresh produce.
The pilot will run for up to six months as a case study. Aboitiz hopes to scale up across other farm locations in the Philippines if proven viable. Ultimately, it’s hoped that Fresh Depot will help millions of farmers.
“Fresh Depot aims to transform the lives of our farmers by offering a platform that optimises their yield and income while reducing waste, making a significant contribution to our country’s food security,” said Aboitiz President and Chief Executive Officer Sabin Aboitiz.
Aboitiz Chief Transformation Officer Emilie Sydney-Smith attended the launch for the second unit and said, “I am so excited about Fresh Depot. It’s such a wonderful idea where the team really narrowed down on what is the most important thing that farmers need – and in these areas they need a lot. But when you can narrow down and say, ‘Wow, we could get a huge amount more pay back to farmers just by introducing cold storage,’ then that's a game changer.”
“And so the ease of which this can happen, but also making sure there’s data that’s flowing around means that we can use this as the first point where we get more pay back to farmers and we stop so much of the produce that’s being grown in the country from going bad before it gets to market,” she added.
Find out more about Fresh Depot here.