Among the success stories of the pandemic which challenged the resilience of businesses worldwide was that of the Aboitiz Group the evolution of which was propelled by the restrictions imposed to control the spread of the Covid-19 virus.
Sabin Aboitiz, CEO of Aboitiz Equity Ventures (AEV), one of the most successful businesses in the Philippines, gave an overview in a recent discussion about his business group’s taking seriously the challenge posed by the emergence of the health catastrophe.
The great transformation, according to Aboitiz, was something that did not offer a business any choice but to find ways to exist. It was for us to transform.
“Now, transformation is like second nature since the whole world is transforming, it has always done so. It’s just that it is happening now at a faster pace and accelerating all the time,” he explained.
“So really it’s very simple. We have to adapt to the changing world. It’s like we’re just being reminded that just like in the pandemic we’re transforming automatically such as people had to do certain things including going more online,” according to Aboitiz.
He recalled that online trade started to take off then since it was forced on people who were observing social distancing.
Most businesses refused to let of the lessons learned from the pandemic because “we don’t want to be caught unprepared again.”
Aboitiz said the philosophy assumed by the family companies is to lead in rapid advancement and not merely follow the trend that led to the birth of the techglomerate.
Many are familiar with a conglomerate but these big business concerns had to adapt and the Aboitiz group made a transformation that is now different from when the contagion started.
“We racked our brains and figured that since we have the technological capability and combined that with Aboitiz Group being a conglomerate so we decided that maybe we need to be a technology conglomerate. So we said, okay, let’s make it short and call it a techglomerate and own it.”
The word was kind of invented within the Aboitiz organization.
Aboitiz said its definition is revising old ways of doing things, the way we communicate with customers, the way we run power plants, the way we think, and the manner we invest in businesses of the future, which are technology-related.
Aboitiz Group is migrating from a conglomerate to a techglomerate with the belief that being part of a conglomerate will mean a premium for the group because customers of each company in the organization can use the information of each other to be able to benefit the whole instead of individual companies.
“Thus information in our food business can benefit the bank and maybe benefit clients of Coca-Cola. That creates a premium,” he expounded.
When one Abotiz company has a client who has built a factory, for instance, and has 1,000 employees, who then become potential account holders of Union Bank. “We create value for the techglomerate,” he indicated.
The way the group and customers mutually benefit, thus, starts from the bank that can lend the 1,000 employees the money at proper rates because of better data obtained from them. “Therefore, we know who we can lend to lower rates, digitally of course,” according to Aboitiz
It starts creating this premium around one client that belongs in one area that was never looked at before as an integral part of the group’s other businesses.
“That’s what we’re talking about which is creating that techglomerate premium,” Aboitiz noted. (To be continued)