How AmBank Is Growing Companies In Malaysia

AmBank’s bold vision for putting more Malaysian companies on the global map

“As a bank, we need to go back to the basics and focus on the people within the company rather than just supplying them with finances,” says Chris Yap, managing director of business banking at AmBank.

It sounds so simple when Chris says it – so natural. And yet, this is a man with a bold vision for the future of business in Malaysia.

We are seated in his office on the 49th floor of a building that used to dominate a scarce Kuala Lumpur skyline. In today’s flourishing corporate environment, however, it is another impressive tower in a view that rivals the stuff of desktop wallpapers the world over.

Built in 1997, the same year as the world-famous Petronas Twin Towers, Menara AmBank is now the ninth tallest building in Kuala Lumpur, with the massive structure an ongoing reminder of their industry dominance.

It is here that AmBank are developing a plan for the growth of Malaysian companies, wanting to see more of the thousands of businesses in the small-to-medium enterprise (SME) stage become major international players.

During my conversation with Chris, the central theme – to which he repeatedly circles back – is potential; the potential for more offices of local companies to dominate the famous KL skyline. For AmBank, harnessing that potential starts and ends with people.

The growth of SMEs

Being an SME is a development phase that every company must go through – no longer a plucky start-up, not quite ready to break into the international scene. Reaching that level, however, is no guarantee of further expansion.

Malaysia’s past has seen no shortage of companies that have failed to grow out of this stage despite seemingly having all of the right systems and tools in place to succeed. It is a trend that Chris is working to overturn.

“We often see banks and other support systems focusing on start-ups and helping them through their ideation phase, giving them the tools to succeed at the early stages of their business,” he says.

“After that, though, they are left on their own and not given the support that they need to continue their journey. That is why we are focused on the SME sector; there is a lot of potential there that is not being harnessed.”

This lack of sustained support is surely a contributing factor to the worrying figures on companies that plateau in their growth and fail to expand internationally.

Brought in to AmBank in February 2017 to set up the new business banking unit, Chris’ own experiences have given him a well-rounded level of expertise in the subject. His ability to impart knowledge and his passion to watch the growth of others would have marked him out as a great university professor in an alternate timeline of his life.

Recognising the challenges of the SME market while also having the influence to execute solutions to the problems, his approach is against the grain of what many would expect from someone in the banking line.

His team has worked tirelessly to ensure that they have the most up-to-date data for why SMEs in Malaysia face a stumbling block when the time comes to expand.

Together with AmBank GCEO Datuk Sulaiman Mohd Tahir and Chairman Tan Sri Azman Hashim, Chris is in an excellent position to assist in business’ growth.

Combatting failure rates

Over 97% of all companies in Malaysia currently occupy the SME space, and the statistics for how few of them live to see their third anniversary is startling. Over 70% of businesses in the region fail to make it past the three-year mark.

For Chris, there are two primary reasons for such a high number. He says: “Often, companies fail because they either don’t have the right business model or the right knowledge.”

Chris Yap,  managing director of business banking at AmBank

“What should I be focusing on, how do I hire the right people, what is the most efficient way to run my production, how do I ensure that the product or service that I’m selling is the best that it can be? These are common questions – and reasons for failure if not answered correctly – for SME owners.

Putting people at the core of his focus, Chris impresses the point that the business leader is the key to scaling any company, as well as being potentially, their biggest liability. A measured approach from an astute chief operating officer (CEO), chairman or other executive can give any company the edge in knowing the right time and circumstances in which to move forward.

The old adage is true in many cases – “pride comes before the fall”. While ambition is always a necessity to prevent any company from growing stagnant, being overly ambitious can be just as toxic.

“With SMEs, as they grow, they encounter a lot of opportunities to move into new areas,” says Chris.

“When a new opportunity presents itself, it can be easy to neglect your core business. Such a lack of focus is another reason for why they fail. People sometimes get caught trying to be too ambitious.

“If you build one hotel and it is successful, you do not need to rush into building a second one. Ensure you know what made that hotel successful and don’t simply assume that you could replicate that success in another location.”

Throughout AmBank’s 42-year history, they have amassed a phenomenal amount of data into the struggles that smaller companies go through. A survey conducted last year further helped them fully understand what they were up against in bringing the SME market up to international standards.

Chris adds: “We don’t pretend that we have every answer, but what we do have is a wealth of experience and advice that we can offer companies to ensure that they scale successfully.”

A fast-paced world

One of the reasons companies are so ambitious in today’s corporate environment is the instant-gratification era. In a world in which messages can be instantly sent around the world at the click of a button and on-demand content has become the norm, many leaders expect to be able to have instant success for their businesses as well.

It is a potentially fatal mistake that many companies, especially in the rapid-growth region of Southeast Asia, fall prey to, according to Chris.

“SMEs in Malaysia sometimes don’t help themselves by not doing the right planning,” he says.

“When you look at the SMEs in more developed countries, they take their time to do their research, take a step back and look at the big picture. Malaysian companies have a habit of rushing in and focusing too much on expansion without ensuring that the structures are in place.”

What have not helped matters are the high-flying exploits of many digital start-ups that have been able to scale very quickly and make a huge splash internationally in a very short time. Rather than be taken as examples of what is possible given the right circumstances, companies should always be mindful of their internal structure before having such delusions of grandeur.

“These days, international expansion is very different from what it was before,” says Chris.

“For an online company, the leap can happen as soon as five to eight years into the business, where previously a company would need to build for nearly 20 years before they even think of doing that.

“Obviously there are examples in recent years of companies going international in a very short period of time, such as Netflix, Uber or Facebook.

“No matter what though, companies have to learn to balance; they need to keep their bread and butter solid while planning their expansion.”

Building a community

Helping companies grow people-first, AmBank is focusing on the people within the organisation and how an exceptional leader can traverse any obstacle. Much more than providing additional cash to those struggling to scale, there is often a root problem that no loan can cure.

“Our studies have shown that 80% of the companies that fail crumbled because of internal matters,” Chris says.

“A lot of companies say that it is because the market changes or there is a new competitor in the market – the fact is that all these external factors can be overcome with the right leadership team.

“We need to help SMEs not only by financing them, but also by giving them knowledge, skills and the opportunities they need to move to the next life cycle of the business.

“People tend to think that financing is the answer to everything, but scaling a business is so much more than that. We need to equip people with the knowledge and environment to move themselves to the next level.

“We want to look at how we can help our customers succeed in the long run and not just provide short-term solutions.”

But how does a bank – by definition a financial institution – help to develop people? The answer is to build a community of leaders with shared goals and shared struggles.

AmBank are finally seeing their masterplan come into action through the ground-breaking AmBank BizCLUB. Equipping businesses with the fundamental tools to succeed begins with knowledge.

With that in mind, the AmBank BizCLUB will gather SME CEOs together to share their personal stories of growth, the challenges they have met along the way and learn cautionary tales from top industry leaders.

“The whole idea behind the AmBank BizCLUB is to impart knowledge to those in the community, getting very successful people to talk to the SME leaders and share their stories of success and failure,” says Chris.

“We want to bring together experts from a wide variety of fields so that we can help these SMEs from as many different angles as possible.”

A series of networking and information sharing events have been set up to ensure that SME leaders are given all the tools they need to succeed. The AmBank BizCONFERENCES will see Malaysia’s most successful entrepreneurs and thought leaders share their expertise across five
locations nationwide.

Kicking off in Penang on 19 September, making stops in Sabah, Sarawak and Johor, before the grand finale in Kuala Lumpur on Nov 1, the sessions will be free to attend and are open to any CEO in Malaysia.

Central to these sessions will be the spread of knowledge and helping SME leaders understand that all companies face the similar challenges as they embark through this stage of their development.

Keeping the momentum going through to the end of the year, the AmBank BizCLUB will be launching a series of intimate CEO Chat Sessions in which a guest speaker will take to a smaller stage each week.

Running from Nov right through to Feb next year, the free events will take a more informal approach and enable SME CEOs to ask questions to speakers who have grown and scaled their businesses successfully, while networking with other leaders who are at the same development stage.

Throughout the early part of 2018, AmBank will be running a unique challenge – the AmBank BizRACE – in which SMEs with the highest potential for growth will be selected for exclusive prizes to help them achieve their goals.

With a carefully-selected panel of judges on board, the race is just another manifestation of AmBank’s large-scale vision for the future of Malaysian companies.

“The purpose of the race is to find the hidden gems that are out there, to uncover them and give them the tools they need to move to the next level,” says Chris.

“We want to look for businesses with great potential; those that have the right business model in place. Once we have identified those companies with the help of our esteemed panel of judges, we will give them everything they need to succeed.

“We will give them coaching, mentorship, public exposure through our media partners and once-in-a-lifetime experiences that will help shape the future of these businesses.”

While keeping more details of the race close to his chest, Chris ends the conversation with a knowing wink and urges me to “watch this space”.

Take the first step towards your own corporate success. To sign up for the AmBank BizCLUB and its exciting lineup of conferences nationwide as well as events for the coming year, visit ambankbizclub.com/registration

Chris’ Top 5 Tips for SME Growth

1. Focus on building your foundation

“Regardless of what industry you are in, a solid foundation is already giving you the best chance to succeed.”

2. Resist temptation to expand too soon

“A lot of businesses move too fast, too soon and too aggressively. They think that they can grab as much market share as possible without understanding the risks associated with that. Misguided over-ambition is a big reason for why companies fail.”

3. Strengthen your internal management

“Whichever direction your company wants to move in, the right people in the right places with the right capabilities are going to be the key to your success.”

4. Avoid a one-man rule situation

“This is an underreported reason for failures in businesses, where the key person decides on everything.

They say “I’m the owner of the company, all the key decisions are made by me” and they fail to consult with the people in their team to fully understand the repercussions. You hired people, now put your trust in them!”

5. Ensure business continuity

“Make sure you have the right tools in place to ensure that the business can survive long-term and in exceptional circumstances. In a typical SME structure, the key person makes all of the decisions and, when that person is not around for whatever reason, business starts to go haywire.

Every SME should ensure that business is not affected when one person is not there. All the way down the line, from top executives to those on a production line, the company should not be affected by one person’s absence.”