Thursday, May 5, 2011

Managing in Asia: What You Need to Know

Thursday, May 5, 2011

Over the past few months, we've interviewed management experts from across Asia. They've worked in a wide range of industries from fashion to finance, advertizing to airlines. There were several common themes.

Asia has great potential, but manage your expectations -- nobody gets rich overnight.

"We try to raise the awareness level of Indonesia. But we've got to do it within reason. We can't allow the pendulum to swing from one side to the other too quickly, because then we will have problems of managing expectations and delivery... We pitch positive realism. We encourage them to hear testimonies from Asean countries, Taiwan, Korea—people that have had a good taste of Indonesia. But we're trying not to oversell Indonesia." Gita Wirjawan, Indonesia's head of the government investment board

"One of the biggest issues is this irrational exuberance. China has suddenly become the fix-all for everything. At the end of the day we tell our suppliers nothing goes upward forever, there are always bumps in the road. China is still wary about opening up the floodgates. They have their own rules that you might even call non-tariff barriers where they limit market access." Helmuth Hennig, Jebsen Group

Invest in your business during the downturns.

"The financial crisis shouldn't change your long-term view. You should have a plan, and we've always been focused on the plan. In 2009, we were more conservative on our expenditures, but we continued to invest even in the downturn. Now that we're in a more positive environment, we can continue to launch products rather than having to delay the roll-out." Murray Martin, Pitney Bowes Inc.

"A downturn is also a good time to carry out capital expenditure—if your rooms are not filled, renovations are easier, and also the costs of these projects are lower because contractors are cheaper." Clement Kwok, Hongkong & Shanghai Hotels Ltd.

Learn the culture: Asia is not homogenous, and cultural differences affect business.

"Asia is definitely a lot more relationship driven rather than transaction driven. As much as you think the Internet pulls the world together and you can do everything over email or Facebook, in Asia that's not the way to go." Selina Lo, Ruckus Wireless Inc.

"You'll get nowhere in China by suing a customer. They're not paying because there's a problem you're not listening to. Now that customer pays literally on the dot every single month." Alexander Molyneux, SouthGobi Energy Resources Ltd.

Finding talented employees in Asia is getting easier, but managers must provide strong leadership.

"We never hire for experience. We like to show them the Regent way rather than change them from their preconceived notions. We look for people from top hotel schools and college graduates that have studied abroad and aspire for a global lifestyle." Steven Pan, Formosa International Hotels Corp

"You've got people coming back from overseas studies, returning to China. But it will take time. I remember from my days in the Singaporean army, we had different levels—manpower, intelligence, operations, logistics. Each of them had their own command chain down the platoon. It's the same mentality. If you don't have the right leaders, your people won't be right at all." Terence Yap, China Security & Surveillance Technology Inc.

Although intellectual property rights are improving, protecting your product is still essential.

"The basic legal framework for IP protection has been there. What we have seen develop over time is not so much better laws, but better enforcement. That's much to the credit of not only the Chinese government, but also the domestic companies that have pushed the whole area as they are the ones who need IP protection as much as we do as they became multinational. As those domestic industries have matured, all the infrastructure that goes with making them globally competitive has come along with it." Sara Yang Bosco, Emerson Electric

"One of the major challenges we face in emerging markets is piracy. The primary reason why people pirate is because of the initial up-front cost of perpetual licensing. It's not that they're evil, it's just that the value proposition of piracy is stronger. If you turn that on its head and say $2 per user per month and you can get email as a business—that's much easier to consume than the up-front cost of a perpetual licensing agreement." Andrew Pickup, Microsoft Asia-Pacific chief operating officer excluding China, India and Japan

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