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If there is one business strategy that has truly shown its worth for electrical component manufacturer Cirtek Holdings, it is technological diversification.
As the COVID-19 pandemic strangled the economy and commodity prices climbed, the Philippine-based technology company experienced significant challenges. But the impact was not as severe as it might have been, had Managing Director and CEO Brian Liu not broadened Cirtek’s suite of products.
“In times of challenge and turbulence, technological diversification is key,” he tells The CEO Magazine.
Yet as the pandemic continued to bite, Cirtek remained resilient through strategic technological positioning implemented by Liu, which provided key exposure to attractive electrical segments that served as growth catalysts and performed well even during the height of the market downturn. This meant that Cirtek could capitalize on the chip shortage, leading it to achieve record-breaking profits.
While other factors played into the solid performance – the advent of application-specific devices and bespoke ‘chipsets’ among them – diversification was instrumental in maintaining healthy sales and positive profitability.
“By diversifying, you spread your risk and position yourself strategically for recovery.”
“Despite the roller coaster ride of the pandemic, the surge in oil prices and metals that influenced raw material pricing – and the squeeze on profit margins, diversification in our product mix – helped us maintain an attractive margin,” Liu explains.
“Diversification is so important in business. Being ultra-focused on one key segment may be profitable during generally good times, but when times are unpredictable that singular focus could be catastrophic. By diversifying, you spread your risk and position yourself strategically for recovery.”
Cirtek, for whom Liu has worked for almost 14 years in a variety of roles, is now gearing itself up for further technology developments, notably the electrification of traditional infrastructures that have historically been mechanical. That will involve more battery management services and power management devices, he explains.
“We have strategically positioned ourselves to begin early preparations for when those segments start to pick up,” Liu adds, further illustrating the company’s diversified approach.
Adding to Cirtek’s positive outlook is what Liu calls an “industry renaissance”. As the semiconductor ecosystem continues to evolve, supply pools are shifting, leading to further ‘premiumization’ for semiconductors in the world of innovation and technology.
“With the reliance of the world on technology continuing to increase, there is a consistent and sustainable demand for various types of growth segments in the semiconductor industry that involve RF [radio frequency] communication, connectivity and industrials,” he says.
Diversification at Cirtek is not limited to product. Within the workplace itself, there is no hierarchical structure where management is the only voice that matters. Diversification of opinions and ideas is cherished.
Fostering such a culture not only reduces toxicity and politics in the workplace, Liu claims, but ensures staff feel valued. Furthermore, ideas that may have remained buried are given oxygen.
“We apply a level playing field where any individual, regardless of their level and status within the organization, is encouraged to express themselves,” he explains.
“This enables talent to flourish as well. Sometimes there are individuals who just don’t want to speak out because they feel it’s not their place. That’s an example of the politicized workspace that prevents introverted individuals from wanting to come out and perform.
“Breathing down the necks of individuals is not something I do, as it imposes on their method of execution.”
“Here, they have the platform to show us the capability and the ideas they posses. It also makes them feel they’re not at a dead-end street.”
The approach, unsurprisingly, speaks to Liu’s general leadership philosophy, which encourages individuality. Micromanaging the workforce piles pressure on staff and suppresses potential, he says. That’s not his style.
“Breathing down the necks of individuals is not something I do, as it imposes on their method of execution. It also impedes their unique talents and the natural composition of what makes a team diverse,” Liu continues.
“And it’s monotonous when everyone does things in the same way. Furthermore, if that way happens to be the wrong way, then the business is heading in the wrong direction.”
In some ways, Cirtek adopts a similarly collaborative approach with suppliers, where a healthy dose of goodwill has not only cemented positive working relationships but driven value to the bottom line.
Liu explains that its tier-one customers have been afforded flexibility on their payment terms, an act of goodwill that was reciprocated when those customers sent more business Cirtek’s way.
“They pumped in more business and increased demand because of the goodwill that was created,” he says.
“That is good relationship building, and it works both ways. It also exhibits the trust we have established with our client base. We have been able to forge and solidify foundations in our relationships.”