Winning Strategies for Asia

Comm update_12 November1 The scale and pace at which markets across Asia are growing can leave you breathless. For both indigenous and foreign corporates, the pressure is on to move fast, whether it’s responding to urbanisation, creating new technology or simply meeting customer demand. It all presents a rigorous test for executive teams as they are expected to devise winning strategies in a complex, competitive landscape where talent is in short supply.

These were some of the key themes to emerge from the Criticaleye Asia Leadership Retreat, held in partnership with China Europe International Business School (CEIBS). Over the course of 24-hours, attendees gathered in Hong Kong to share ideas on innovation, sustainability, talent and what the rise of China’s private enterprises means for multi-national corporations (MNCs).

Hellmut Schütte, Vice-President and Dean of CEIBS, observed: “Perhaps the golden age in China is over for foreign MNCs. Everyone is here now, labour costs keep rising, and China’s own MNCs are making enormous progress.”

Aside from the emergence of international powerhouses like e-commerce conglomerate Alibaba and telecom equipment and smartphone maker Huawei, competition was described as particularly acute in China’s third and fourth tier cities, where an increasing number of home-grown private enterprises are capitalising on their local market knowledge. “China still presents significant opportunities for MNCs but it’s now a lot harder to realise,” said Stephen Mercer, Partner in Charge of Multinational Clients at KPMG.

“You have to understand what segment of the market you are dealing with as they can be so different. If you were operating in Europe, you wouldn’t replicate your market entry strategy for each country or market and China [is] the same. Unless you are clear about what you are trying to achieve in China, it will be very difficult to succeed.”

For those companies that do get it right, China’s $9.2 trillion economy provides plenty of openings and areas for growth. Hellmut said: “If China ‘only’ continues to grow its GDP by 7 per cent over the next ten years, it will still almost double the size of its economy. If you combine [Brazil, Russia, India and South Africa] … and the next ten emerging markets, all together they add up to the size of China’s economy today. This is very much in the mind of China’s Government when it deals with the outside world.”

The ability to bring new products to market rapidly was generally agreed to be a significant differentiator for successful businesses. George Yip, Professor of Management and Co-Director of the Centre on China Innovation at CEIBS, said: “Chinese companies have a deep understanding of the customer – [they take] a pragmatic, profitable and customer oriented approach to innovation… Western companies can be too slow because there are too many processes in place.”

Sujit Chatterjee, President & CEO of TATA Consultancy Services China, said that “innovation, as it was understood in the Western world, was for a long period about creating new markets, but, as we see in Asia, especially China, innovation is about capturing markets”.

Companies have to be capable of adjusting to the characteristics of a rapidly changing and geographically diverse country. “Each year, Western companies set-up more R&D centres in China than in any other country in the world, including the US,” George added. “Western companies have an appreciation for Chinese methods of innovation; they are eager to learn how to innovate faster.”

A long-term view

If businesses are to continue to take advantage of the consumer appetite for goods and services, attendees agreed that it needs to be done in a sustainable fashion. Peter Wong, President of Dow Chemical Greater China, said: “Sustainability is very much part of our strategy in terms of driving business growth. For example, in China we are looking at a few of the issues the Government is focusing on, such as food security and safety.

“If we bring our capabilities together, we believe that we’ll be able to find a solution that is going to help the Government tackle some of these challenges, like food spoilages.”

Setting the right strategy and implementing it is key. Peter Lacy, Managing Director of Strategy Practice & Sustainability Services for Asia Pac at Accenture, said: “Companies need to be aware of opportunities to improve their approach to sustainability… It needs to be integrated into organisational design so that support functions are created to incentivise people, so they want to make improvements. That’s as true here in Asia and China as it is elsewhere in the world.”

The challenge is to create alignment across the whole organisation. “At Dow in China, I’ve been trying to build a cross-collaboration model,” said Peter Wong. “It’s been about looking at what the issues are and seeing how people can jump beyond their own boundaries. Hopefully they’re thinking about how we can better collaborate, utilising the R&D lab to [address] the issues we have – if you don’t even understand your true capability, you can’t really develop an innovative mindset.”

Cecilia Ho, President of International Paper Asia, commented: “There actually has to be a change in mindset around sustainability; you’ve got to accept that if you do not operate sustainably you cannot operate at all. [If you understand that], then you’ll do it because it’s beneficial to the company as well as to the environment…

“You can do all the communication and internal marketing – and we certainly do – but the most important thing is that employees are convinced that you practice what you preach. So it needs to be driven by the senior leadership team.”

According to Peter Lacy, thinking sustainably can be a real driver for innovation:  “At the moment a lot of the focus in Singapore, India, China and Japan is on urbanisation and smart technologies and how they can be used to better manage energy and transport systems. There is a ‘digital revolution’ taking place, and we are really only just beginning to see the power of connected physical and digital infrastructure in areas like cloud computing, mobile tech [and the] Internet of Things (IoT).

“This is clearly a strong business imperative, but it’s also a sustainability benefit… Companies in China especially are using things like smart-metering and smart-grids to drive energy efficiency per unit of GDP.”

Matthew Smith, Global Head of Market Development for the Internet of Things at Cisco Systems, estimates that over the next ten years the connectivity of devices will create profits and cost savings of approximately $19 trillion. “People are not afraid to fail in China and that type of attitude is going to be really beneficial in this kind of economy,” he said.

The impact of the IoT will be felt in multiple sectors, from retail and healthcare to life insurance and, of course, energy. Matthew continues: “Texting went from zero to $300 billion in about six years. Thanks to WhatsApp and We Chat, it’s gone back to zero again – the point is a lot of new markets will emerge due to the Internet of Things.”

People first

If technology is unlocking new business models, and globalisation creates a more competitive environment, what kind of skills-mix is required to come out on top? Even for those companies that have a theoretical answer to this question, the reality of identifying and keeping the right people continues to be tough.

In the marketing industry, for instance, digital is having a seismic impact on the way customers behave and this requires a different set of skills. Chris Riquier, CEO for Asia Pacific at Taylor Nelson Sofres, said: “As marketers, we’re not investing sensibly and we’re not recognising the ROI today. We’re also ignoring new platforms, which means we don’t have the skills and expertise in the business.”

The quality of graduates, particularly in China, was also discussed. Hellmut questioned whether the country’s education system, with its emphasis on hierarchy and rote-learning, was preparing the younger generation for the dynamism and innovative thinking required for the modern workplace. “Ten years ago there were one million graduates, whereas today you have 7.5 million graduates and the number of universities and colleges has doubled during the same period,” he said.

“There has been tremendous growth but there is the problem of young people coming into the job market and being unable to find employment. At the same time, you have companies crying out for people. As companies must innovate in order to compete, it is not easy to find the talent you need when they come from this rules-based background.”

In order to overcome the shortfalls in talent, companies were encouraged to start looking regionally to bring in people of the right calibre. Michael Guo, Partner of Human Capital & Change Management Advisory for Greater China at EY, said: “Businesses are increasingly connected. Ten years ago the prime movers in Asia were China, India and Indonesia…

“Now … there are so many different countries where different solutions are required, and for that you need a diverse range of talent, especially for your senior leadership team.”

Global leadership

When discussing ‘Asia’, it’s important to remember the distinct national and cultural differences. Each country and region will present its own idiosyncrasies in terms of doing business, from how relationships are built, bureaucracy navigated and the regulatory environment understood. Nevertheless, the Retreat demonstrated there are questions being asked of senior leadership teams in Asia that will resonate internationally.

Andrew Minton, Executive Director at Criticaleye, said: “Whether leaders are confronting issues around sustainability, talent or digital transformation, they must be able to… see the bigger picture in order to shape their own strategy.

“That’s why, regardless of geography or culture and irrespective of industry or function, there is an overwhelming need for leaders to step out of the day-to-day if they’re to combat complexity successfully.”

Executives need to be prepared to reflect, collaborate and benchmark with others. Trying to establish strategic clairity in isolation is no longer an option.

I hope to see you soon

Matthew

www.twitter.com/criticaleyeuk

Advertisements

Talent Strategies for High-Growth Markets

Comm update_24 SeptemberIt’s tough to formulate an effective strategy for managing talent in high-growth markets. While it’s tempting for companies to repeatedly opt for short-term fixes given the speed at which individuals move between roles, it’s not a sustainable approach. Instead, if you want to maximise the chances of keeping your best people, you also need to have a long-term plan in place which allows them to develop and grow as leaders.

According to Jack Wood, Criticaleye Thought Leader and Professor of Management Practice at China Europe International Business School (CEIBS), the onus is on CEOs and Divisional MDs to start thinking ahead: “Companies are really short-term focused nowadays; setting aside long-term developmental systems doesn’t get much support. It takes an unusually wise senior executive to have that kind of vision for his or her people and organisation.”

César Cernuda, President of Microsoft Asia Pacific, acknowledges that it can be challenging. “It is sometimes easier to look for short-term fixes rather than building for the future,” he says. “It [can be] hard to strike the balance of how much development investments we need to make to realise optimal ROI and not become a training ground for our competitors.”

It’s a case of accepting that in high-growth markets a degree of mobility is inevitable. Bryan Marcus, former Regional Head for Latin America at Volkswagen Financial Services, observes: “Within certain skill-sets, particularly IT, you’re always struggling to find and retain the best talent because somebody is always potentially outbidding you.”

Of course, this doesn’t mean leaders should shy away from devising solutions. “At Microsoft, intentional talent planning and development is a key part of our strategy, especially in high growth, emerging markets like Asia Pacific,” says César. “We need to balance both short and long-term priorities in order to build the right overall foundation and be constantly evaluating, for each market, whether we need to build, borrow or buy talent.

“Often, all three strategies have to work hand-in-hand or in parallel against a clear two to three-year backdrop…. It is also vital that clear accountabilities are placed on expat senior managers to build local talent and drive a good succession and development plan.”

Yetunde Hofmann, former Global HR Director at Imperial Tobacco, suggests that problems will occur when the senior leadership team doesn’t take a step back to identify local capability requirements: “The questions you need to ask are: What are you trying to achieve in that local market and, therefore, what specific needs do you have in that market from a leadership or talent perspective?”

There needs to be an underlying knowledge of people’s capabilities throughout an organisation. Robert Bailey, President and CEO of Singapore-based travel specialist Abacus International, comments: “One of the things which we’ve done since I arrived, which has helped immensely, is create a competency-based performance management system.

“High-potential [employees] may not be [recognised] on [the] first pass… [so the] system was extremely helpful in both logging talent and identifying opportunities for development and rotation of promising individuals.”

On the ground

The temptation for foreign corporates operating in emerging markets is to fill senior positions with expats. Naturally, there are logical reasons for doing this but if there is a real lack of understanding about how a local market works, problems will soon arise.

Mei Wong, Affiliate Partner for Asia at executive search firm Warren Partners, comments: “You have to first of all question why you are sending expats: is it because they understand the company and the culture? Because they are people whom you trust? Or is it because you can’t find the right talent locally?”

For many medium-sized companies, a limited talent pool can result in a lack of managers with international experience. Mei says: “I have seen companies sending people to Asia who’ve never worked outside of the UK, so they don’t have the local market knowledge. That’s going to be challenging.”

In addition to this, organisations can’t be seen to be preferential in terms of who comprises management and the senior team. David Best, President for Asia Pacific at global aviation services provider BBA Aviation, says that “knowing that the top position will always be filled by an expat is no motivator for high-potential local talent”.

Els Vandecandelaere, Vice President of HR at pharmaceutical company Janssen, agrees: “There must be a healthy balance between expats and local talent. I don’t believe in an organisation where its strategy is to have expats fill the senior positions for all of their emerging markets…

“Hence our focus is on developing local talent to accelerate them through a diverse set of experiences so they can get to the top positions…. This includes working for a couple of years in an established market.”

It comes back to creating a talent map which accommodates the idiosyncrasies of local markets. Rob Atkinson, Chief Executive of Adshel, the Australian subsidiary of outdoor advertising company Clear Channel, explains that leadership development training, mentorships, participation in special projects and opportunities for secondment to other areas of the business are all vital in pushing people to the next level.

Alan Bannatyne, CFO at recruitment company Robert Walters, says: “I think you’re just always trying to keep the standards as high as you possibly can, and that by itself challenges people – it keeps them on their toes, allows them to grow their capabilities and therefore develops their career.”

The proverbial war for talent in high-growth markets is as intense as ever. Whether it’s Asia, Africa or Latin America, people with the right skills are in serious demand. That won’t change any time soon, so it makes sense to ensure you’re doing all you can to give your best people every possible reason to stay.

I hope to see you soon.

Matthew

www.twitter.com/criticaleyeuk

The Future of the Workplace

Comm update_10 September1

Ideas on what constitutes a fulfilling and productive working environment are shifting rapidly. They’re raising questions about mobility of talent and what it means to be an effective leader as the way in which knowledge is transferred, both within and outside an organisation, becomes more dynamic. Indeed, a perfect storm of new technology, globalisation and changing demographics is blowing away assumptions about how we work.

Lynda Gratton, Criticaleye Thought Leader and Professor of Management Practice at London Business School, suggests that the formal link between ‘work’ and ‘place’ is beginning to soften: “We are already seeing the rise of flexible and remote working arrangements as well as creative hubs where people use workspace as and when they need to.

“It seems to me that as working lives become more of a marathon than a sprint, we are going to see more emphasis on work that excites and inspires people and helps them to grow…These concepts are not just about employee well-being, they are… crucial to the competitive advantage of a company.”

It’s incumbent on leadership teams to get a grip on what is already underway. Stuart Steele, Partner for Human Capital Consulting at professional services firm EY, comments: “There is always competition for good talent and an inability to predict what the work environment will look like in three or four years’ time, I think, can put an organisation at a disadvantage.”

Let’s get digital

From the mills and factories of the industrial revolution to assembly-line car production at the turn of the 20th century, technology has reshaped working practices by reinventing notions of efficiency and productivity.

John Lewis, Chief Operating Officer for communication services provider Airwave Solutions, says: “Mobile working or process improvements are absolutely there for the taking. There are lots of different examples that I’ve seen, such as the creation of collaboration zones and the use of tools for collaborative working.”

How best to take full advantage of this flexibility is open to debate. Susanna Dinnage, EVP and MD for Discovery Networks UK & Ireland, explains: “A great deal of people working on their own, possibly at home, may benefit individuals in terms of family commitments and reduced time spent travelling… I understand that, we have busy lives… but what you lose is the alchemy of teams working together.”

John notes that organisations must be careful not to underestimate peoples’ appetite for interaction. “That can be the biggest challenge,” he comments. “How do you get over the fact that people just sometimes need to spend a bit of time gossiping or just having a reaction with others in their team to help process what’s going on?”

The hierarchy that traditionally existed in organisations is being broken down by the volume of information now available at employees’ fingertips. This is causing leaders to rethink how they engage with employees, encourage collaboration and make decisions.
Julian Birkinshaw, Criticaleye Thought Leader and Professor of Strategy and Entrepreneurship at London Business School, says: “Think back to the traditional role of the leader. Back in the industrial era, he was responsible for squeezing as much value out of his resources – money, people – as possible.

“In the knowledge era, he or she has become used to being an expert… They were also the conduit of information, the person who accesses and then disseminates information across the organisation. But if this information is now widely available, and if there are experts at all levels, the leader of the future has to think about what their value-added role is.”

According to Julian, leadership in this context will entail a more interpersonal role, helping other people to make decisions and avoid becoming overwhelmed by the volume of data available: “Good leadership… [will] be action-oriented; that is, following through with people to ensure they deliver on their commitments. One of the risks of ubiquitous information is that it causes analysis paralysis – there is always an opportunity to collect more.”

Melting pot

A more age-diverse workforce will certainly throw up some new challenges. Susanna says: “I am observing a new generation that is very smart. I look at our interns – they are engaged, they have plans and they have expectations. They don’t come here to stuff envelopes.

“They are not afraid to ask for half an hour in your diary to understand how you got your job – that’s fantastic. I love this confidence they have… [as] they step forward and… are contributing.”

There is a sense that the expectations held by millennials in the workplace are, in some respects, higher than of generations gone by. Stuart explains: “There have always been career-focused individuals, with an appetite for rapid progression, however, looking at groups, if you’re 25, your aspirations for broad opportunity and rapid progression in an organisation are typically a lot greater than what a 50-year old person’s was when they were that age.

“Where an older employee may have taken 20 years to progress three-quarters of the way up the organisation, the 25-year old wants to get to that same position in five years or less. How do you balance that? How do you meet their aspirations of rapid progression while not disenfranchising this person, who has delivered good service for the last 20 or so years?”

These are the types of questions which senior leadership teams need to be thinking about and addressing. Stuart adds: “As organisations’ demands for skills and capability change over time, the intrinsic value of the employees with 20 or so years of experience – those with real depth and breadth – changes from a position where one could arguably describe them as a commodity, to a situation where they have become ‘key retains’ focused both on delivery and the development of our younger workforce.”

It calls for a closer awareness of how to bring the best out of a diverse mix of talent. Lynda comments: “It’s clear that encouraging different age groups to work productively and harmoniously with each other can be tough. Those who have made it work often put job design and collaboration at the centre.

“Those that design jobs in an inflexible, linear way have found that they cannot be responsive to a person’s life stage and aspirations…. Right now, companies are struggling with this inflexibility – for example, not knowing how to handle mid-career hires because their processes are all geared towards hiring graduates.”

A multigenerational workforce will require organisations to consider different career paths and job designs simultaneously, rather than opt for a cookie-cutter approach. Specialisation, limited contracts and partnerships are expected to become the norm.

Julian comments: “The workplace of the future I would like to see is one in which people are given a lot of freedom to pursue the work that interests them, with a lot more bottom-up accountability, and far fewer formal bureaucratic systems for co-ordinating our activities. This is the model we see in many start-up companies, but once they go above 100 people or so they often lose this vitality.”

The impact of what is happening in the workplace will be genuinely game-changing and that’s why it’s something boards must take the time to try and understand. Unless they’re thinking about what it means for an organisation’s future, they won’t be able to turn what’s occurring into a tangible competitive advantage.

I hope to see you soon.

Matthew

www.twitter.com/criticaleyeuk

Winning & Retaining Talent in Asia

Comm update_15 Oct1

The biggest headache for many organisations operating across high-growth markets in Asia is caused by trying to find and keep hold of the best people. While there’s no failsafe plan to prevent quality employees moving on, there is a growing need to devise ways of building trust and loyalty that go beyond remuneration and financial incentives. After all, someone else will always be willing to pay more.

Marcus Downing, Associate Director at management consultancy Hay Group, highlights the scale of the problem: “There’s basically a talent shortage in many parts of Asia. Countries such as China and Vietnam have a massive amount of investment put into them but the human capital just isn’t there. You have the situation where, locally, people move jobs every [six to] 18 months and get a 92 per cent pay increase for moving…

“Companies in those regions are trying to hire the best of what’s available… they might fly in an ex-pat which is expensive and only a short-term solution; they might try and hire locally. But they are only getting what’s available, not necessarily the person that can do the job.”

Rose Colledge, CEO of employer marketing and talent management services company Work Group, says that “monetary rewards as well as career development are viewed as more important than other benefits, such as work/life balance and flexible working, particularly in China”.

Career development can certainly be used as a way to differentiate a business in a fiercely competitive labour market. Serge Colin, Group HR Director at construction supplier Lafarge Tarmac, comments: “If you want to bring in the best talent you need to expose them to senior level people during the recruitment process… introduce them to the top managers, so [it’s clear] they are being hired by the multinational.”

Howard Kerr, Chief Executive at standards and training provider BSI, says: “Good talent is often nervous about joining a foreign company that they’ve never heard of, so new entrants have to do an awful lot of upfront pre-selling and preparing the groundwork, explaining who they are, what the business prospects are, the style of the business and who their customers are… because it all comes down to a question of trust.”

According to Craig Wilkinson, Regional Managing Director for the Hong Kong-based LDC Asia, which is part of the UK mid-market private equity firm LDC, people and talent form “one of the toughest challenges” for companies entering the region. He explains: “A significant proportion of the workforce is mobile and prepared to move frequently for better terms – however, there is some caché associated with working for a foreign-owned business and we have found our portfolio companies… have been able to secure and retain good people.”

Facing the future

Cultural nuances need to be studied and understood. Brian Stevenson, Criticaleye Board Mentor and Non-executive Director of the Agricultural Bank of China, comments: “If you’re trying to head-off mistakes then you need to think about how senior executives going [there can] learn about the region, but also how they grow and develop a board that is culturally sensitive to how the region behaves and thinks, otherwise you won’t get the best out of it.”

Nick Allen, former VP of Strategy and Portfolio at oil and gas company Shell, says: “Status matters in Asia and a job title is a demonstration of this. I once lost a top talent in Singapore because he was moving from a President role in another company to a manager role in Shell. Financially it was a promotion but he wouldn’t take it because of the title… people would find out what his real ‘title’ was and he’d lose face.”

All too often, assumptions are made which prove misguided. Mei Wong, Affiliate Partner for Asia at executive search firm Warren Partners, provides the example of western companies giving senior roles to people who are returning back home to China after jobs abroad. There can be disproportionate expectations, says Mei, about their knowledge and ability as it’s easy to become out of touch with a “constantly changing and complex new China”, and such individuals may also have only held “relatively junior positions abroad but are given full responsibility to run the China operations”.

Conversely, dropping in people from HQ won’t provide a long-term answer either. Howard Thomas, Criticaleye Thought Leader and Dean of Lee Kong Chian School of Business in Singapore, comments: “Unfortunately, many foreign firms get into the practice of bringing ex-pats to fill key jobs in Asia as part of their global talent development programmes. As a result, local talent often jokes that they have a new boss every three years – year one is training the new boss, year two is helping them do something unique, and year three is packing them up to go home.”

Roger McDowell, Chairman of engineering company Avingtrans, says that, after six years in China, “the obvious answer to the ‘hiring’ question is not to hire senior people, but to build our own”. He explains: “We hire people with potential then give them challenges and the room to [develop]. To retain talent we keep our business growing faster than our people are able to grow… that stretches and excites their imagination and ambition. The business environment needs to be fun, exciting and [should show the] potential ahead.

“We rarely bring people in at a senior level – as an example, for our Aerospace business Sigma, our first employee recruited in 2005 is now [General Manager] of our facility employing 150 people… [We let people] prove themselves before they are promoted.”

Getting that degree of trust in people can take years to build and time is a luxury that the majority of companies invariably feel they don’t have. Poor hires will be made but if it becomes apparent that this has happened, the general rule is to act swiftly. “We see lots of companies who make recruitment mistakes and don’t do anything about it,” says Roger. “In Asia, if you make a mistake, don’t be proud: change things quickly and move on.”

Howard Thomas says: “Companies need to really understand the local customs and practices and consider how hiring is not only about obtaining talent, but also about building the right relationships for the success of the business.”

I hope to see you soon.

Matthew

https://twitter.com/criticaleyeuk

Don’t Let Good Talent Go to Waste

People may well be the greatest asset a business possesses, but that won’t count for much unless the skills, knowledge and potential within the whole organisation are fully utilised, especially when operating globally. That’s why the manner in which talent is identified and developed is proving to be a hot topic in the boardroom as it’s evident that too many companies are not getting the most out of their best and brightest.

Rudi Kindts, Non-executive Director for technical recruiter Matchtech and former HR Director for British American Tobacco, says: “Talent management is rapidly becoming a leadership issue. For too long, it has been dominated by process, methodology, technology and best practice. It has become a tick-box exercise: competency framework developed – tick; state of the art recruitment and selection – tick; efficient online development – tick; performance management system in place – tick… And still the same old questions are being asked and the same old responses given.”

It’s no longer good enough. Bruce Cox, Managing Director at Rio Tinto Diamonds, comments: “Talent management has to be built into the management processes of the leadership teams within the organisation. We undertake formal quarterly reviews to discuss key talent, from each of the operating businesses, cascading up to the executive committee of the company.

“These reviews are designed to ensure that our key professionals are being developed to their full potential. Success can only be fully achieved, however, if the business leaders are sharing their talent across the business.”

This is where the real challenge lies, as managing talent effectively tests the culture and trust within the different parts of an organisation, which is why such programmes need to be led from the top. Jon Dymond, Director at business consultancy Hay Group, says: “A failure to articulate the value in your people [across the globe] is a leadership issue. The better companies clearly own their talent globally… [and avoid] people getting shifted to meet emergency, short-term-needs, preferring instead to opt for early workforce planning that is connected to the business.”


The Big Picture

Basic talent logistics is one thing, but aligning the goals of an individual so their ambition segues into the overall purpose of a multinational business is something else entirely as this requires vision, leadership and communication. Sarah Murphy, Group HR Director at international food business AB Mauri, says: “[Your approach] has to start with understanding what the business is trying to achieve, before setting the framework for what the right standards should be for individuals in each role type.

“That becomes your central spine and a common reference point to go back to, and only then can you be clear on any gaps… If you don’t have the standard, managers will assess against the last ‘best’ that they had, whereas what we are trying to look at is the ideal, not just the best that we can find.”

Rudi explains: “It requires the careful management of a challenging paradox: on the one hand it is paramount to increase efficiencies through simplification and standardisation of processes and methodology; on the other, [best] practice should allow you to personalise as much as possible.”

In the long run, there are significant benefits to adopting a strategic approach to talent management, both in terms of using resources effectively and running a business on a more efficient basis. Gerry Skelton, Human Resources Director for the UK’s Air Navigation Services Provider NATS, says: “Without the ability to cross-fertilise between different business models or agendas, organisations are gravely disadvantaged in a competitive marketplace.”

And he should know. NATS has recently evolved from two countries of operation to 29, significantly reviewing and revamping how it uses and develops people within the organisation. “We wanted to address key issues at the executive level, just to have the latest updates [on where talent is within the business], their capability and our bench strength and quite frankly, it’s been eye-opening,” he says.

The result has been to create a framework where staff can move into different areas of the business and apply their skills and experiences in new markets, rather than before, where a career would largely be a vertical progression within a particular division. “Cultural legacy has been the greatest challenge we’ve come up against,” says Gerry. “People don’t like change. You get someone who has been there ten or 15 years, and the next step up would be theirs by tenure, and now you’re talking about changing that.”

It won’t be possible to please everyone and attempts at overseas appointments, placements or even just promotions are never a sure thing, regardless of how good the company’s strategy and communication might be. Sarah says: “You might have a plan but you’ve got to be quite pragmatic about it because it depends on the individual’s life circumstances, and there is no guarantee that an individual will move to a location that for two years you have been grooming them for, because life doesn’t happen like that.”

Overall, in a global market, the company that can align its vision, values and strategy at a Group and local level will be better positioned to get the best out of employees. Annette Burgess, UK Commercial Director for Publisher Baker and Taylor, says: “There is a need for a broad ownership… Global shared values and a global talent pool are needed [alongside] local talent pools. Managing talent can become complex at the global level, so we need to have a better understanding of cultural differences, legislation, demographic trends and labour laws.”

How this is achieved will vary from business to business, but it is not something to be ignored. Indeed, those that get it wrong, or don’t recognise that a different approach is needed, will suffer harshly in the international marketplace.

Managing Entrepreneurial Growth

Entrepreneurs are typically restless beasts, which is why they are suited to the highs and lows of trying to build a successful enterprise. Myriad personal and strategic obstacles must be surmounted and tough decisions made as they strive to turn ambition into reality.

All entrepreneurs harbour the hope of one day making their fortune. But the first stage is survival, for which you’ll need a great idea and a stubborn belief in yourself to make it work. “If the idea lasts, you should make money,” says Don Elgie, Founder and Chief Executive of PR and communications business, Creston plc, which last year announced profits of £14.5 million.

While some are simply happy to create a lifestyle business, others will have the vision and guts to create a company and then sell it for potentially life-changing sums of money.

For Jo Sellwood, who co-founded her executive search business, Strategi, in 2000 and sold it seven years later, a key tenet of entrepreneurial success was a five to 10-year exit plan. She says: “We had a clear strategy right from the beginning that we would one day sell the business… We concentrated on building up a great business over the first five years then shaping it in whichever way was right for the chosen approach at the time of sale.”

Adapting to change

Whatever direction the business ends up taking, each stage of growth will require different things from the entrepreneur and they will need to learn to adapt their management style accordingly. David Molian, Criticaleye Thought Leader and Director of Business Growth and Development at Cranfield School of Management, says: “It could be that, at one stage of the business, driving down costs is necessary, but at another they may need to lead innovation. Each will require very different management and leadership styles.”

When Mark Robinson, CEO of Advanced Power Components plc, a company founded by his father in the early eighties, moved into the hotseat he took the bold decision to float the company in 2001 and expand it internationally. He says: “It meant moving out of developed markets and into emerging markets, which are far less predictable in terms of timescales and growth rates. I’ve needed to keep existing teams of people with me while operating in what would be way outside their comfort zone.”

Certainly, the decision to go public in order to achieve growth can be an enormous test for the inveterate entrepreneur. The challenge often lies in coming to terms with corporate governance, getting the right board in place and realising they are no longer the heart and soul of the business.

Charlie Cunningham, Corporate Finance Director at small-cap broker finnCap, says: “An entrepreneur must realise that the key to getting the right board in place is making sure that each member of the board adds value. It should not be a box-ticking exercise. They may open doors, establish proper corporate governance or provide an invaluable sounding board for the entrepreneur as they seek to build the business.”

The right top team

Technology entrepreneur Paul Luen, CEO and Co-Founder of environmental component manufacturer Martek Marine Ltd, is under no doubt that “people” have been the enabling force for the business. He says: “We took on a new managing director whose complementary skills have made a huge contribution to our success. However time consuming the recruitment process might be, there cannot be a high enough premium placed on bringing people on board who will fit in and complement your culture.”

If an entrepreneur is serious about achieving meaningful growth then they will have to overcome their controlling instincts and realise the importance of delegation and teamwork. For Jo, going into partnership with her financial director was a revelation: “She was a great, steady person that could do the details and think about things from an operational point of view, and a great leveller to my ideas, strategy and vision. Entrepreneurs tend to be confident and forthright, but they don’t know everything.”

The entrepreneur needs to be surrounded by people who possess the know-how to turn good ideas into something practical. Peter Blezard, a founding shareholder of environmental science company, Plant Impact plc, says: “To me, anything other than sales is a cost and a business must learn how to convert customers into cash quickly. Therefore the strategic plan must be capable of adapting and evolving.”

As a business grows the entrepreneur must also learn to change people along the way. This will require making some tough decisions. David says: “These will be difficult but necessary conversations with people – often friends – that may have been with you right from the start and you may have a strong emotional tie with, but if they are no longer appropriate for the stage the business is currently at, they must be refreshed.”

Don, who founded Creston in 2001 and has grown it acquisitively as a public company, says: “During our first acquisition it became clear that the FD was inadequate. Rather than fire her, I listened to the management who pleaded that it would send out the wrong signals, that we would be perceived as being just like the big corporations we were trying to better. I therefore delayed six months before firing her, which was a mistake – you have to be totally happy with the finance function. Separately, I cannot overstate the importance of a good second-in-command.”

Paradoxically, the growth strategy might call for the creator themselves to step aside and let in some fresh blood. Such was the case for Andrew Mearns Spragg, Founder of 10-year-old marine biotechnology company Aquapharm, who recognised the right time to step aside and bring in a new CEO. Instead, Andrew became CTO, leaving him free to focus on spotting opportunities in the technical space to keep Aquapharm ahead of the game: “I think it’s important that a good team takes on the experience, not just at the helm, but also at the technical levels. Certainly, I felt that it was the right time for me to step aside and learn from someone else who had been there and done it before.”

Each stage of the entrepreneurial cycle will require different levels of input and focus. As their business grows, the entrepreneur will need to build around them a talented team in which they can entrust key responsibilities for driving their business forward. This will be essential for its cultural development and sustainable growth. As advertising guru David Ogilvy once put it: “Hire people who are better than you are, then leave them to get on with it.”

Please get in touch if you have any comments about the issues raised here.

I hope to see you soon

Matthew

www.twitter.com/criticaleyeuk