The secret to business success in Asia

The companies that are outshining the rest in Asia are more likely to be mid-sized, more likely to be operating within and outside Asia, more likely to bring staff in from head office on a regular basis and more likely to focus on recruiting leaders with personality who are culturally sensitive than focus on their skills and previous experience.

These were some of the findings in a report titled Connecting Countries commissioned by telecommunications and information services company Telstra Global based on 4,155 interviews with senior executives in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam.

The results were presented to delegates at the Asia Business Champions conference held at Asia House on 5 June, 2014. More than 100 delegates attended including Asia House corporate members, senior business figures from Telstra, representatives of UKTI, UKIBC and the Foreign Office, diplomats, and other business leaders.

The executives had been asked a variety of questions to identify those companies which have been exceeded their financial and strategic business objectives in the past three years and those companies which expect to do the same in the next three years.

Just five per cent of companies said they had far exceeded their goals in the first three years and expected to exceed them again in the next three years. Telstra named these firms as Asia Business Champions.

The report details what sets these top performing businesses apart in Asia.

It found that companies that succeed in Asia are more likely to be mid-sized (have 200 plus staff) and less likely to employ less than 20 staff; more likely to be operating and focused on markets both inside and outside Asia; more likely to be headquartered in US or UK than in Asia; and more likely to be in financial services of ICT sector.

The executives who were interviewed said that the secret of their success was as much about “hiring the right leaders” and the soft metrics of candidates.

Personality traits such as flexibility and adaptability were more rated as important among Asia Business Champions than previous experience, knowledge and language skills since it was easier to compensate for poor language skills than it was for personality.

“Immersing yourself in the culture of a country is just as important, if not more than learning the language,” said Tom Homer, Head of EMEA and the Americas for Telstra Global. Resilience, curiosity and creativity were the most important leadership character traits these companies valued.

The report also found that those companies that sent staff from head office to the local office and encouraged staff from the global headquarters to take positions in local offices to build up appreciation of local values, performed the best.

Asia Business Champions also took staff from the local office to head office and successfully communicated the needs of the local office to the head office.

The top performing players also tended to look to expand at the same time as consolidating in existing countries so were moving forward using multiple growth strategies simultaneously.

China, India and Japan were the top three markets Asia Business Champions were focused on. However the research found that generally Western companies were more focused on India than Asian ones were. Asian companies, on the contrary, were more focused on Japan than Western ones.

One of the panellists at the conference Jeremy Parr, a Partner at Linklaters, said: “Those who work with us for periods in Asia seem often to have a more dynamic and successful career than those who end up staying their entire career in one place.”

But he added there were challenges to businesses opening in Asia. “The domestic political agenda will always trump the interests of foreign investors,” he said.

It was best to have a time limit on a joint venture of five to 10 years, John Ott, Partner at Bain & Company advised.

“You have to do due diligence on any local partner. Find partners that have similar values to you,” Steve Buckley, managing director, OCS Group Ltd, advised. He added it was best to get a controlling equity at the outset, if not a buyout clause and before entering the market, businesses should examine “how to resolve issues if it does not work out.”

He also spoke about the importance of being prepared before entering Asia. “Talk to the Foreign and Commonwealth Office, Asia House and UKTI, British business groups and chambers in every market. You have to do your preparation. It’s very difficult if you’ve not been out there. You must not give the impression you are here today and gone tomorrow. Asians have long memories so it will be difficult to re-enter. You need persistence and patience. “

Homer said Telstra Global, which is headquartered in Hong Kong, planned to commission similar research once a year. “Telstra is a global communications company with a special emphasis on Asia. This piece of research is really relevant to us because it helps us to understand our customers and helps us grow and solve their problems and helps them grow into new markets,” he added.

See a slideshow of the event here:-

naomi.canton@asiahouse.co.uk

Read what Simon Baptist , Chief Economist in the Economist Intelligence Unit, had to say about the growth of Asian economies and which ones to look out for here.

To get more tips on how to successfully do business in Asia check out our Navigating Asian Markets guides here.

The Telstra Connecting Cultures report can be downloaded here. 

View Tom Homer’s presentation that he gave at Asia House on slideshare below:-