It's the people, stupid !

This blog is a follow up on the one I wrote a while ago on the smiling curve. Next one will be about the REAL challenges for Thailand with respect to AEC.

So let’s say you are aware that the future is not at the bottom of the smiling curve. You decide to change your business model and move either upstream, in more R&D and component design, or downstream, to develop a brand and services. Hooray, problem solved !

Maybe. Let’s take a look at HTC. Up until a few years ago, HTC was the FOXCONN of today, doing the OEM assembly of hand phones for others (and doing it quite well). HTC understood the concept of the smiling curve and knew there was no profitable future in remaining an assembler. The company launched its own sleek designs and a cool brand, and was for a while the darling of investors and consumers alike (timeframes in the mobile phone business are short). Today HTC is struggling for market share against Apple or Samsung: from a 10.7% market share in Q2 11 HTC dropped to 4% end 2012 (source www.idc.com and Wall Street Journal 12 November). Its stock price trades as one sixth of its all time high at the beginning of 2011.

What went wrong ? It is not sufficient to just update your business plan and corporate website. A key challenge HTC has been confronted with is that it has not been able to build up its people’s competencies in hardware and software that would allow it to come up with products and applications that can challenge the competition (reported in Global Times China on 13 October). Although HTC continues to develop and bring to market new models, it seems the company is relegated to playing catch up with the big players. Not a recipe for survival in the long term (which means 2 years in mobile phone business) !

Having a fresh strategy going forward is definitely necessary for getting out of the smiling curve. But a company needs to drill down into every aspect of its business to evaluate the impact of this new strategy, and address the gaps. Designs and capital investment are very tangible elements of a new strategy and they can in the short term give the impression the execution is well on its way. Yet what really makes the difference is how people’s competencies are developed to fit with this new strategy. Any deficiency in this area will show its ugly head a few years down the road.

It might have been the economy in the past (http://en.wikipedia.org/wiki/It's_the_economy,_stupid) but in 2012, it's all about the people,  stupid !

What’s your name ? Fine, thank you.

When discussions take place around the challenges of AEC Asean Economic Community 2015 (soon-to-be AEC 2016), one easy topic that is always debated is the lack of English proficiency of many Thais. At a seminar I attended recently, the audience “voted” on the challenges for Thais in AEC 2015 and English language came up as the top of the list with nearly double the number of votes on the second in the list (international experience).

Is the mastery of English really the top issue that would hold back international development for Thailand around the AEC ? I think this is a false problem that hides the real one.

Of course, there is room for progress. But a lot has changed since I arrived in Asia 20 years ago. It used to be that only the lucky few who studied several years abroad were capable to communicate in English. Great progress has been made since, through teaching courses, exposure to international exchanges (mostly by email) and internet-based communication tools.

Tourism has been Thailand’s main economic pillar for years. The level of English proficiency has not been a brake (some other things have …). In fact, the great majority of tourists coming here don’t speak English themselves. I recall the Italian tourist, gesticulating in rapid-fire Italian, perplexed that the hotel staff didn’t understand him. What is the worldwide leading tourist destination ? France. Try and ask for directions in English anywhere in France. Bon courage !

Oh, but we are talking about business, not tourism. So let’s take a look at China. Not really on the top of the ranking as far as English proficiency is concerned. Yet this does not seem to have stopped them from doing business with the world ! And no, the rest of the world has not learned Chinese in the last 20 years. People just live with and struggle through the language issues that occur anywhere in the world when people communicate in a language other than their mother tongue.

I don’t believe English is the main challenge for Thailand going forward. I have a pretty clear idea of what it is, and it will be the subject of my next blog. In the meantime, I invite any of you reading this  to share your thoughts on what you think this main challenge is !  Let me know in the comment section or email me directly at peter@asioconsulting.com . I look forward to the comments !

The Land of the Smiling Curve ?

Thailand has made a name for itself over the last decades for efficient manufacturing, in particular in electronics and automotive assembly. The country is known for a dedicated and attention-to-detail workforce. Most if not all of industrial activities today are manufacturing or assembly. AEC 2015 is offering exciting opportunities and serious challenges. What should Thai manufacturers do in this context ?

Smiling curve, downloaded from rieti.go.jp

The concept of the smiling curve was developed in 1992 by Stan Shih, the founder of ACER (Taiwan). He highlighted the fact that margins in manufacturing were getting squuezed and that manufacturers need to move out of pure assembly and look for more added value if they want to remain profitable. A company can either go for the R&D and innovate in developing components that other companies need (think Samsung selling to Apple), moving towards the left on the curve. Or they can focus on service and product design (think Apple), at the right hand side.

The total "cost" of an iPhone assembled by FOXCONN for Apple is 179 US$. Out of this, 6.5 US$ is the cost of labor, the Chinese added value. The rest, 172.5 US$ is made up of raw material and compenents, all of which are imported from other countries (Korea, Japan, Germany, the USA and other countries). The iPhone's real added value is in the hands of the component designers and suppliers (172.5 US$) and the dealers, retailers and Apple itself (equivalent to 321 US$ for an iPhone sold at 500 US$) (info from presentation at KMAP 2012 by Prof Jay Lee, based on Xing and Detert, 2010).

With neigbouring countries, with significantly lower labor costs, opening up, pure assemblers will clearly be challenged. Not in the short term, because established supply chains, economies of scale and experience will continue to provide an advantage over new and smaller startup operations. But if the Thai assemblers stay with their current business model, they will definitely lose their competitive edge in the 5 coming years.

Thailand is known as the land of smiles but maybe the challenge, with AEC 2015 around the corner, will be more about the dangers of remaining stuck at the bottom of the "smiling curve" ...

Emergency ! Is there a project manager in the room ?

Project manager is probably one of the least exciting titles to carry on your namecard. Really, what is there to manage about a project ? It's much cooler to identify yourself as being in business development, or at least have "innovation" in your job title. Yet two recent events in the news reminded me of the value of project management.

Apple brought out the iPhone 5 but the improvements of the phone were completely overshadowed by the talk about the disastrous map application that replaced Google maps. Not just some difficult-to-identify bug but real issues that make the application nearly useless.
4GS was awarded the contract to recruit and train security staff for the London 2012 Olympic games. 16 days before the opening ceremony, the company informed the organizers they were still missing more than 1700 guards. PWC made an audit after the fiasco and reported that the company did not realize the scale of the work, and listed numerous errors, including bad management.

These are not small projects. They are immensely important for the companies, their stakeholders, and reputation. These projects were in the works for years, with hundrerds of people involved in each company. Was there any project manager in charge ... ?

Here is a reminder of a few basics of managing projects towards success:

- milestones or deadlines are there to be met: if you do not reach your objective at a certain stage in the project, you need to change something  for the project to get back on track ... action is needed and just continuing and hoping for the best at the next milestone makes no sense;

- a no-go means we don't go; Steve Jobs was notorious for dictating design changes when the curve of a button or the sound of a click was not to his liking. These were critical elements (for him) and compromise was not allowed. If a customer-critical requirement is not met, the project manager needs to make sure the product is not launched hoping customers won't notice.

Project management is not very exciting, and only comes in the news when something goes wrong. Project managers deserve credit for all the projects that we don't talk about: those that deliver on time, budget and quality in a complex world.

Will you be my friend ? Right now ! Please ... ?

On the way to Shanghai, I was sitting next to a British businessman who had arrived in Shanghai 9 months earlier. He complained … “In the UK, if you have a product and people need it, they buy it. In China, if you have a product and people need it, they will buy it ... only if they are your friend. How am I supposed to make friends in 9 months ? Why can’t they just see the value of my product without the friendship thing ?”

At the KMAP 2012 conference in Shanghai a researcher who wanted to do research in Chinese companies admitted she wasn’t successful in getting access to them. She understood the importance of quanxi (http://en.wikipedia.org/wiki/Guanxi) and asked people in the conference for help in getting her the needed contacts to make progress with her research.

Here is my advice on the importance of relationships in business based on quite a few years in Asia

- be aware of the relational characteristics of doing business in Asia; if you think that the Asians have to adapt to your approach (like the business man did) you will face frequent frustrations and won’t get very far;

- build relationships and try to enjoy the process; be active in business clubs  or chambers of commerce and give talks (not sales pitches) to share your experience; link up with your business contacts’ contacts;

- let the relationship develop: exchanging namecards, although important in Asia, does not constitute a relationship; relations take time so do not jump on every fresh contact to “sell” your service … it will surely kill the relationship;

- set realistic business targets that take the environment into account; there is ample evidence that developing a business in Asia takes time; if your business objectives don’t reflect this, you will disappoint your organization (and yourself).

At least the researcher was aware of the need to create and build on relationships. That's a necessary first step. And beyond that, creating and maintaining relationships requires genuine effort. It is a necessary time investment but one that will bear fruit for the long term.

Manufacturing Excellence. Delivered.

That is the tagline of the consulting business I am officially starting today. After more than 20 years in different international companies in the operations and manufacturing world, I am excited to use this experience to help other companies improve their performance.


for more details go to www.asioconsulting.com

When you Google for "manufacturing excellence", most of the entries you will find will focus on six sigma or lean. Or better still, lean sigma. Services around manufacturing excellence will highlight the benefits of whatever method the consulting company believes in, and state that all your pains can be solved with this method (and this method only).

Yet, in my experience, it is not the toolbox that makes the master. It is on the contrary, the team, and how this team gels and works every day to achieve the company's goals. In this respect, I like the following very simple but profound quote from Dr Alex Bennet (phrased as a hypothesis, with original stress):

The performance of your organization every day depends completely upon what every individual in your organization does that day.

The performance of the organization depends on what every individual does. Not on a few specialists focusing on a six sigma initiative, or another team working on a lean project. No, it really is about how all employees, every single day, perform to ensure the company reaches its objectives.

The second focus is on "does". It is about the action each employee takes. It is only action that can change the performance of the organization.

That, for me, is what manufacturing excellence is about: having a team that takes action every day to reach the company's objectives. And I intend to help organization in South-East Asia reaching those objectives.

My website is www.asioconsulting.com and email is peter@asioconsulting.com.

Creating trust with teams in Asia

In an earlier blog I wrote about the importance of creating trust in order for people to express their opinion on a work related subject when asked for it. But then, how do you create trust ? There are a lot of references out there about the importance of creating trust at work and how to go about it. But what is specific or different in Asia ? Two main differences stand out in my experience.

1.       The working relationship extends into the private sphere, and so does the trust

In Western countries, trust (at work) is limited to issues … at work. Honesty and transparency are critical for a trusting relationship. Straight talk when needed, and listening skills are other key ingredients. These traits need to be demonstrated by the leader at work.

In Asia, the personal and social relationships are important in addition to the work relationship. For Asians, contexts at work and outside of the workplace intermingle, and it is important to interact with your team members beyond the pure work related activities. This means participating in social events, even if they seem not really necessary or a worthy investment of your time. But also attending personal events of your closest team members, like weddings (when invited !) or unfortunately also funerals of relatives (even when not invited). Affective trust is a precondition on which trust at work can be built.

 

2.       Praise in public and correct in private

One of the key requirements listed for creating trust is the importance of telling things as they are, straight and honestly. In Asia, managers need to take into account the importance of face (or more importantly the loss of face) in a team. Try to address issues in private rather than putting someone in his place in front of the entire team. This is not the same as "hiding the issues": everybody in the organization will know when the boss has put someone in his place, even if the meeting was behind closed doors. Public loss of face equals loss of trust in the relationship.

So my advice for (in particular expat) managers is to take the time to build up a ‘social’ relationship with your team members, and to keep the tough but necessary discussions out of the public sphere. It is tempting to focus just on work because there is so much to do and the quicker things get done the better. In the long run however, a good bond with your team members will create a better working performance.

Cynefin and the floods

In my previous blog I introduced in a simple way the Cynefin framework. I discovered this last year, right in the middle of the floods that caused so much destruction in Thailand. The framework helped me at that time to do - with the teams - a reasonably good job of steering our organization through this period. Our manufacturing facilities were not impacted at the time, but our employees and our business activity was.

The flood situation, at least as far as my organization at that time was concerned, can be described as a "complex" problem. Characteristics of complex problems are that they are in flux and unpredictable. There are no right answers, and there are many differing ideas of what should be done. The situation was not simple or complicated, obviously, but also not chaotic. In fact, the events dragged out over several weeks. There was no chaos or sudden dramatic event. Day after day, we obtained (often contradicting) updates from the different news sources on the situation, tried to imagine what could happen, and get ready for those eventualities.

So how did viewing this situation as a "complex" problem help me at all ? As explained in my last blog, the Cynefin framework helps leaders to determine how to react to a problem at hand. For a complex problem, the appropriate approach is Probe - Sense - Respond. The following steps are recommended in the Harvard Business Review article of November 2007.

Open discussions and dissenting views In this kind of situation, a command-and-control approach does not work. The leader does not have the answer any more than the next person. Even the experts had differing opinions about what would happen and about what should be done. Within the organization, we created differeent groups to develop ideas of how we could get ready for all possible scenario. Extreme opinions (from "nothing will happen" to "we're all doomed !") were allowed for discussion.

Set barriers We decided not to review or react to every single piece of "news" or information out there. Internet, blogosphere or Youtube all carried hundreds of snippets of information each day. Considering or evaluating this information overload would have taken half a day. Instead, we created our own measures of the rising water level in our surroundings and objectively and frequently reported this to the people in the organization.

Monitor for emergence Many team members were given the freedom to implement their ideas, even though we did not know the appropriateness at the time. This was not a situation where one could turn to the boss for the correct answers. Allowing all ideas to rise and have people implement most of them created a dynamic and motivation that kept the team going for different weeks.

The crisis turned out OK for the organization although several employees were affected personally. As the leader of the organization, viewing the situation as a complex problem and addressing it with the appropriate approach helped me to maintain the team's motivation and commitment. Having said that, I sincerely hope that nobody needs to encounter this kind of dramatic flood, with our without the Cynefin framework !

Leading with Cynefin

This blog is to share a very interesting model I discovered only about a year ago. In a following blog, I will explore more about a concrete situation where this model very much proved its worth.

I am talking about the Cynefin model, developed by David Snowden. http://en.wikipedia.org/wiki/Cynefin will explain the basics of this model (including the meaning and pronunciation of the Welsh word “cynefin”). It has been around for a while but was popularized in the edition of the Harvard Business Review issue of November 2007 (if you google for it you will find a free PDF version online).

The Cynefin framework classifies the problems of this world in five domains, but I do not address the fifth one, disorder, here:

Simple. Here, the relationship between cause and effect is obvious to all. The approach to solve problems falling in this domain is Sense - Categorise – Respond. The leader can minimize his involvement, delegate and ensure the appropriate processes are applied to the problem. This is the world of best practices.

Complicated. The relationship between cause and effect can be identified but this requires analysis, investigation or expertise. The problem solving approach is Sense - Analyze – Respond. The leader has to make sure expert opinions are evaluated, and also listen to contradictory advice. 

Complex. The relationship between cause and effect can only be perceived in retrospect, not in advance. The approach to this kind of problems is Probe - Sense - Respond. The leader has to keep an open communication and listen to all suggestions (not just those of the experts). He needs to allow for experimenting and look for the emergence of patterns.

Chaotic. There is no relationship between cause and effect for the problem at hand. The approach is to Act - Sense – Respond. Here, obviously, there is no such thing as using past experience and novel practice is needed. There is point in looking for the "best solution": the leader needs to take action and establish control.

The importance of the model is to realize that different problems require different approaches. We all would like problems to be simple, or complicated at the most, where an action has a clear impact. But that is not how things happen in the real world. As a business person, it is important to be aware of the type of problem you are addressing (simple, complicated, complex or chaotic) and then apply the appropriate approach. Each approach results in “respond” which means taking action. But rather than deciding on the action based on a standard formula, the steps leading to the action are very different (Sense + Categorize, or Sense + Analyze, or Probe + Sense or finally Act + Sense) and depend on the typology of the problem.

The art of listening ... when nobody's talking !

I recently came across another spin on the same old topic of the art and importance of listening (5 Great Tips ... !). Often listed as a key character trait of great leaders, listening to the input from the team allows leaders to evaluate different views and to make the best decision for the organization. After all, you don’t really learn anything new by listening to yourself talking. A challenge in cultures and organizations where he who talks most (loudly) is considered as knowing what he is talking about.

But a concern I often hear in Asia, mainly from expatriate managers, is “I want my team’s input, I ask for their ideas or suggestions, but I am not getting anything …! They just tell me what they think I want to hear”. In other words, the leader is trying to listen but nobody is talking !

It’s a well described culture trait (coined as “power distance” in Hofstede’s culture studies, see www.geert-hofstede.com) that, in general, Asians do not easily provide their opinions, let alone challenge those of their leader or those in more senior positions in the organization, even if the leader explicitly asks for differing inputs. And although generalizations are always limiting, I have experienced this at different occasions in Asia.

So how do you listen when nobody’s talking ?

My recommendations based on the experience with teams in Asia:

-          Create trust first. Participating and contributing ideas is a normal part of the Western mindset of professional life. In Asia, this can only exist if there is a real relationship of trust. Trust is not created with a team, but with one individual at a time. And creating trust takes time, there’s no shortcut solution !

-        Develop one-on-one exchanges in addition to the team discussions. Most people in Asia will not easily speak up when they are in a group, and for sure not if they have an opinion that is different from the majority. The fear of “losing face” makes for people to prefer to stay quietly to themselves. In a one-on-one exchange, where trust has been created, people will easily contribute their ideas.

-        Don’t kill ideas. This is an obvious one, but if the leader criticizes ideas that have been volunteered, those who spoke up will quickly stop contributing. Look for the positive element, however small it is, in each suggestion, and build on that. And if criticism is appropriate, do it in a one-on-one situation.

So next time you try to listen but are not getting the suggestions you are expecting from your team, ask yourself what steps you have taken to create the fertile ground for this exchange.

Measuring citizen satisfaction

Satisfaction surveys are regularly used by companies to evaluate satisfaction of customers or potential customers with their products or services. Sometimes a government agency (especially in the tourism sector) does the same to collect data for their promotional development.

But I had never seen a country measuring the overall satisfaction of its citizens (and tourists) with the whole set of services that exist within the country. I came across the report about the 2011 Customer Satisfaction Index of Singapore CSISG study, organized by the Singapore Management University SMU. The result is based on 40,000 questionnaires including 7,000 tourists.

The survey measures customer expectations, perceived quality and perceived value for businesses and services in 9 core economies for Singapore: finance and insurance, info-communications, transportation and logistics, retail, food and beverages, healthcare, public education, private education and tourism. Questions are asked about the private companies in the different sectors, but also about public services: universities, national mail or  public transportation like bus or subway systems.

The overal "national" score for 2011 was 69.1. The color codes in the chart indicate the companies or aggregate categories with a statistically significant improvement (green) or deterioration (red) in satisfaction compared to 2010.

The initiative was started in 2007 so after 5 years it is possible to see trends.

see the full report at www.smu.edu.sg/centres/ises/downloads/csisg2011_resultsoverview.pdf

It is impossible to compare these results for Singapore with any other country because no other country bothers to take the time and effort to establish this kind of data and maintain it over a period of time. As Lord Kelvin said "To measure is to know." But it is for sure easier to opinionate or come up with flashy headlines than to develope clear measurements about citizen or customer satisfaction. An example of why Singapore is way ahead in Asean as far as general development is concerned.

Thinking ...

I watched The Iron Lady on a recent flight to Bangalore. Brilliant movie around the intriguing personality of Margaret Thatcher (played by Meryl Streep). Love her or hate her, she was a character and several of her quotes are still being used today. There was a specific exchange, where the ageing Baroness Thatcher (born in 1925, still alive today), suffering from hallucinations about her diseased husband, is being examined by her doctor (from www.twcguilds.com/assets/screenplay/the-iron-lady.pdf).

DOCTOR

Still it must be a bit disorientating. You are bound to be feeling.

MARGARET

 What? What am I ‘bound to be feeling’?

 

The DOCTOR looks up from his note taking, hearing the quiet challenge in MARGARET’s voice.

 

MARGARET (CONT’D)

People don’t ‘think’ any more. They ‘feel’. ‘How are you feeling?’ ‘Oh I don’t feel comfortable with that’ ‘Oh, I’m so sorry but we, the group were feeling...’ D’you know, one of the great problems of our age is that we are governed by people who care more about feelings than thoughts and ideas. Now thoughts and ideas. That interests me. Ask me what I am thinking

 

The DOCTOR hesitates, letting MARGARET settle until

 

DOCTOR

What are you thinking, Margaret?

 

MARGARET looks at the DOCTOR, quietly struggling with a fury, threatening to unleash

 

MARGARET

 Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become your character. And watch your character, for it becomes your destiny. What we think, we become. My father always said that. And I think I am fine. But I do so appreciate your kind concern.

 

 

 

The Thinker (1902), Rodin

From Wikipedia.org, thinking, or thought, generally refers to any mental or intellectual activity involving an individual's subjective consciousness. It can refer either to the act of thinking or the resulting ideas or arrangements of ideas. Thinking allows beings to make sense of or model the world in different ways, and to represent or interpret it in ways that are significant to them, or which accord with their needs, attachments, objectivces, plans, commitments, ends and desires.

What we think, we become. So what have YOU been thinking about lately ? I mean thinking. Not emailing. Or tweeting. Not SMS-ing or Facebook-ing. No, not all that. But thinking. Do you actually know what you have been thinking about ? You'd better, because if She is correct, it is what you will become.

Routine or innovation ? Or both !

Everybody talks about innovation (preferably “breakthrough”) and doing today what you have done in the past sounds so boring. Yet operations, meaning turning out products and services in a reliable and repeatable way every day is what brings in the revenue. There is often tension between the concept of innovating and the need for routine and consistency.

The “cycling worlds” model that Jonne Ceserani develops in his book “Big Ideas” is a good visualization of how operations and innovation are connected.

The operational cycle is at the left of the model. In this world, adherence to plans and conformity to product or service specifications requires routines, procedures and rules. This is the world of "write what you do and do what you write". Don’t change anything, no exceptions, no interpretations. Creativity is limited to applying simple techniques like PDCA to solve the operational issues that can pop up.

On the right hand of the model, we have the wheel of innovation. Here we speculate, we invent, experiment, fail or succeed. There are obviously no rules or procedures, there are no limits.

The essence of this model is of course in how these two very distinct and impossible-to-mix wheels are connected. And, more than that, the fact that one wheel cannot remain in motion without the other one. From the operational cycle, we once in a while need to "jump away" from the world that is controlled and subject to routine to the cycle of innovation. If we don’t do that, we will basically remain turning in our operational cycle for ever. The mentality of "don't repair it if it's not broke" will lead to being surpassed by higher efficiencies or innovations created by others. By jumping out towards the innovation wheel, intentionally (and not when it's too late), an organization can open up for reinvention. But once a successful innovation, improvement or breakthrough is found, the organization absolutely needs to move back from the innovation cycle onto the operational cycle, and update the routines and procedures with this innovation implemented. And keep on producing quality and reliability customers will pay for. 

There is no mind-shattering breakthrough in this model but it explains in a simple way how both cycles are necessary and valuable.

Shared Value: solving the new recruits challenge !

In the January 2011 issue of Harvard Business Review, Michael Porter and Mark Kramer introduce the idea of "shared value". The principle of shared value focuses on companies not just doing good for society and/or the environment, but actually finding business approaches and solutions than enhance both the economic performance of the company and the societal aspects. The authors emphasize the need of seeing a corporation within its environment, a cluster of suppliers, customers and institutions.

Universities and high schools as public education centers

Companies recruit experienced employees as well as new graduates. A criticism (especially in Thailand) is that new graduates have a lot of theoretical knowledge but very little experience about what goes on in an organization, be it a corporation or government entity. Student trainees are often accepted as a gesture of goodwill towards a neighboring university, but subjects assigned to these trainees are not core to the company’s activities and are mostly limited in terms of added value. At the same time, when new recruits are "integrated", a lot of effort is spent to bring their knowledge up to a practical level in order to deal with real business problems. This costs time and money for the employer.

Possible approaches focusing on Shared Value: knowledge creation

A simple but joint effort around knowledge management can bring shared value to the university, the student and the organization. The idea is to connect a company's knowledge management (KM) initiative with what is being taught to students. A few concrete examples could be:

- students are invited to actively participate in companies' KM events, like brainstorming or community of practice exchanges; for sure the student has no real experience, but their “unfiltered” knowledge can bring interesting insights for the company

- real projects (critical to the company’s strategic objectives) are launched and students are invited to participate as resources

- company employees actively participate in the education effort in the university, either by presenting projects or by lecturing students on real-life problem resolutions

The company receives concrete inputs from students that add value to the company’s knowledge. Students benefit from a real-world experience and can feel valued in that their inputs can be put into practical use. Practical aspects would need to be organized: students receiving extra credit for participation in a company’s KM initiative, company ensuring student input is received without preconception and the university ensuring that the company’s inputs are integrated in its curriculum, course evaluation and project work.

Possible approaches focusing on Shared Value: innovation

A very similar approach could focus on innovation. Students can be invited to participate in the company’s innovation programs. Innovation contests are organized not just for academic purpose, but to solve real corporate problems.

Shared Value created

The ideal approach would be that several companies in a cluster contribute to the knowledge and innovation programs described above, with the main university or high school in the neighborhood. There is shared value created for the student, the company and the university.

For the company The student graduating will be better equipped for the corporate world. Although several may not join the companies that have participated in the program, some will and after a few years of effort, companies should see new recruits better equipped to be integrated more quickly in a corporation. This should allow reduction in onboarding costs from the company’s perspective.

Another benefit is the “image” that the company creates, vis-à-vis the community and the university, as well as the motivation for its own employees, some of whom will participate actively in this program.

For the students Students who have participated in this program will be able to develop their professional career more quickly. They will have a more “solid” CV even without having had their first real job. Their exposure to the corporate world will also give them a better understanding what kind of company they want to work for.

For the university The program will enhance the university’s reputation as it will be seen as preparing students for the corporate world. This can lead to higher student numbers.

KM and culture in South-East Asia

Below is the argumentation I wrote up for my PhD dissertation subject, and submitted to Dr Farhad.

When an organization decides to embark on a KM initiative, several elements need to be in place for the initiative to be successful. Alignment with corporate strategy, management support and involvement, adequate resources and an organizational culture that encourages knowledge sharing are often listed as critical factors. Even if all these factors are in place, it comes in the end down to whether the individuals in the organization actually use the tools, technologies and approaches that make up the KM initiative.

At the individual level there are different factors that determine to what extent each employee will participate. Some key elements are incentives, peer and boss relationships, sufficient training and individual values. The adoption of new technologies has been modeled in the research literature (models like TAM, UTAUT or task-technology fit) and focus on the ease of use and the perceived personal usefulness. If an individual evaluates that a new technology is easy to use, and sees the benefit of using it, he or she will have an increased intention to use and an actual increased use of the technology. In other words, the individual will actively use the KM technology and contribute to the KM initiative.

The concept of “ease of use” does not only refer to the purely technical aspect (is a software easy to navigate, intuitive and visually appealing ?) but also whether the individual feels “comfortable” exchanging information through the technology platform. The individual’s “comfort”, in this context, depends on values, learning preferences and styles of interaction with others in the organization. These are influenced, if not determined, by national cultural norms and societal orientations.

Eastern cultures (South-East Asia, Japan) are described at collectivistic, whereas western cultures (in particular the USA) are individualistic. In western countries, it would make sense to implement KM technologies that focus around the individual (expert blogs, data-mining, individual learning tools). Individuals in western cultures will easily adopt these technologies as they fit well with their personal and cultural values. In eastern countries, KM technologies that focus more on the interconnectedness of the knowledge in the organization (communities of practice, brainstorming, online chat) will better fit with the Asian collectivistic culture.

My thesis therefore posits that KM technologies that are aligned with national cultural traits will have a greater rate of adoption than those that are not. I intend to evaluate this in the context of Thailand.

This research is important because most KM technologies and tools are originating from western countries. Multi-national companies will often consider a standardized approach to the deployment of their KM initiative (which makes sense from the point of view of coherence and cost). If the main question of this thesis can be confirmed, it would give very valuable information to organizations on how they should adapt their KM rollout depending on the national cultural traits of the different countries they operate in.

Lean Retail has arrived in Thailand !

Retailer IKEA recently opened its first store near Bangkok. This blog is not about the quality of their products, the value for money, the children's playground or the Swedish meatballs for sale in the food court (the queue was too long). A walk through the newly opened store shows some interesting examples of lean practices in the retail supply chain, and a fresh change from the traditional retail approaches prevalent in Thailand.

Smart use of space



4000 alarm clocks: hope
you like 'em white

The store layout is a great example of fully optimizing expensive retail space. Customers meander through the store, following guide boards posted at different locations. The customer is encouraged in a "natural way" to walk the whole length of the store, even if he has a clear purchase purpose in mind. Looking for children's furniture ? Well, you'll walk through the kitchen, bedroom, office and bathroom sections as well. The turns and twists in the walking route make the visit over all less boring than the traditional squared layouts where a customer would typically go directly to the section of interest. The walking route definitely entices customers to pick up things they never thought they needed, and that having nothing to do with children's furniture !

The full space of the retail store is organized with the interaction between customers and the merchandise in mind. Probably 95% of the goods under the roof are displayed in view of the customers. Rather than having a few items on the shelf, for most products, all the available merchandise is put right on the shopfloor, often on the actual shipping pallet. Interested in a nice and simple white alarm clock ? A quick count of the display confirmed there were about 4000 of them right there for the taking. Daily refilling of the shelves is not needed here !

 

Anyone for red or white garbage bins ?

The sheer size of the store gives the impression there is plenty of choice. And indeed, there is a lot of things everywhere. But upon closer inspection, a few interesting findings can be made. The choice is finally not that wide. Alarm clocks: white only. Plastic garbage bin at 59 THB ? No point in asking for any other color than red or white: everything available is right in front of your eyes. I came across ton-loads of these bins at no less than 4 different locations in the store. Several high-sales items are repeated at different locations, giving the impression there is loads of merchandise, while in fact several items are repeated all along the “shopping route”.

Manpower is limited to the strict minimum

In a traditional retail organization, goods would be received, sent to a storage area, be (partially) unpacked, and then shelves would get replenished as they get empty. That’s lots of handling, from the truck to the storage, and from the storage to the display shelves, with packing and unpacking. Most of the time piece by piece. In IKEA, entire shipment pallets are simply positioned right on the shopping floor. The pallet is brought from the truck right to the place of ultimate interaction with the customer. Basically a single manipulation. One pallet contains up to 1500 glass bowls in the pictures below. When the pallet is empty, just roll in a new one.

In most department stores, personnel is all around and spends most of their working hours standing next to their goods waiting for customers. IKEA’s store probably runs on 10 times less personnel (my estimate). Personnel are stationed at no more than 10 clearly marked Information points, rather than standing idle all around the store.

Intelligent packing solutions

I saw several smart examples of packing. Entire pallets are put on the shopfloor, in the way they have been unloaded from the truck. Only the outer protection is removed. The rest of the protection of the goods is designed very economically and cleverly. The amount of packing material is minimized, and optimizes at the same time protection, total weight and manipulation required to pack (at the supplier’s side) or unpack. There are gains for the supplier as well as for IKEA. And rather than having employees doing the unpacking and manipulation, it's the customers who take care of this in IKEA.

I found it quite refreshing to see this radically different approaches in terms of retail for the first time in Thailand. It remains to be seen if other retail organizations will be inspired by the IKEA solutions.

A few thoughts on leadership

I have been interviewed by Jean-Francois Cousin, executive coach, for his monthly Hi! Managers article published in one of the leading English-language newspapers in Thailand, the Nation (http://www.nationmultimedia.com/). My blog post for this month is the interview as it has been published.

Meet Peter Cauwelier, Essilor’s Executive Vice-President in charge of Asian Operations - 6 factories in 4 different coutries, 8000 employees, of which more than 4,000 in Thailand. Essilor is the worldwide leader in ophthalmic lenses with such famous brands as Varilux^â and Crizal^â, and enjoys a continuous and solid growth. Peter is from Belgium, arrived in Thailand 20 years ago, is married to a Thai, and speaks, reads and writes Thai fluently.

What are you passionate about, in Leadership?

What I love -when I discuss with my colleagues about their plans- is at first to understand their way of thinking and their objectives before offering additional insights or suggestions, rather than just review their proposals in details; I like to help them get a more complete picture, to explore new directions, so they make a more informed decision. In contrary, many people might dig down into an idea and tear it into pieces. I don’t think I bring as much added value if I only analyze and approve or disapprove. As leaders, I believe we need to make sure that we add value each and every time we talk.

Another thing I feel strongly for, beyond “setting a vision and goals”, is that good old fashioned way of rolling-up the sleeves, showing that I push myself -setting an example for others to do the same- and walking-the-talk.  At the end of the day, it’s all about what you get done. In this regard, one of my favorite books is “Execution, the discipline of getting things done” by Charan and Bossidy.

What are personal rules you have chosen for yourself as a professional?

One is to come in on time and … not to work too long in the evening. I want to set an example that it’s not because you work twice as long that you are more efficient. I have to admit though that I don’t really manage to stay away from my emails after 6pm!

Then, when you see managers working late again and again…

I think they should think about the way they manage their time, and make sure they find an optimum balance between the number of hours they work and their effectiveness, especially after 6 or 7pm. I found out a long time ago that setting time-boundaries enhances my concentration and effectiveness. Nevertheless, in certain situations (crises, urgencies …) working late is unavoidable.

Which career move was particularly beneficial to you as a leader?

A career transition that took me from managing our largest factory in Asia, with thousands of workers, to a newly-created functional job in North America, where I was all alone without subordinate… That was complete change, and I must admit it was difficult at the beginning: I had to prove myself all over again, in a different working atmosphere. I struggled but learnt a lot. And today I am very proud I demonstrated that I could do a good job both in running a very large organization and in a functional role working with peers.

Your advice to managers who are offered a functional job after an operational one?

People with a large operational experience may look at a functional job as a downgrading, if they measure their self-esteem in the number of people they manage. I remember a Thai manager who was initially wary of accepting such a career-move… and - just a while ago - he thanked me for having encouraged him to take-up the challenge. He recognized that this functional role was no less important than his previous operational job, and that he had grown a lot from the experience.

What are the toughest challenges you have had to manage so far? And what did you learn from them, as a leader?

The crises in Thailand -political turmoil or flooding- were tough challenges for us. We had to find out how differently we could operate, to continue to deliver our customers through the crisis. I learnt 2 major lessons: the importance of assigning everyone a clear role and sticking to it, and the necessity of communicating continuously in a context where unreliable information overflows. We reported twice a day with real-data and no interpretation or speculation. Another major confirmation from our successful crisis-management: put people first, at all cost, make them safe, and then they will help you take care of the business.

What would you like people to say about your work here, 10 years from now?

Not that I managed thousands of people, but rather that I lead and helped individuals to progress and made a difference in their career. I am delighted when colleagues tell me I helped them grow, sometimes through very strong challenge. A plant manager shared with me recently: “I appreciate that you were so straightforward and shook me up: it helped me grow”. Such ‘challenge’ and ‘shake-up’ is fine as long as you explain why, present options going-forward and follow-up.

Who is an inspiring role-model for you? And why?

I am not inspired as much by larger-than-life personalities or heroes as I am by looking at the people I work with, seeing what they do better than me, and learning from them; my colleagues are my role-models.

What advice would you like to give to Thai managers?

“Dare” a bit more at work, be more assertive, especially when you face disagreements or strong discussions. Don’t take these personally. Don’t think others don’t like or respect you anymore. Separate the professional discussion from the relationship.

And dare a bit more to step-out of your comfort zone. Companies need people with broad experience, and a more complete baggage -generalists who can adapt-.

What are the top-3 skills you would advise managers to excel at?

1.       Think 2-steps-ahead, define your priorities and focus on them -ensure 80% of what you do everyday is linked to your priorities-

2.       Follow-up, follow-up and follow-up; it’s all about what gets done. Make sure people dig to the bottom of issues, by deep-diving yourself when necessary

3.       Step-back and look for what people are not doing or seeing, then help them get the most complete view of things