AFG Venture Group Dispatches

Corporate advisory and consultancy in Australia, South East Asia and India.

True Leaders – Asia and beyond

August 10th, 2012

by Catherine Fox and Narelle Hooper, BOSS Magazine, August 2012

It sounds relatively straightforward. Combine longer-term thinking, an international focus and an entrepreneurial attitude that favours speed and flexibility over bureaucracy and you should get successful business leadership.

But finding examples in Australia proved tricky; leading a complex organisation is a tall order in these days of economic volatility.

In such an environment, the ingredients for outstanding leadership must include a capacity to think far beyond the next quarter and an ability to confront challenging conditions.

The True Leaders identified by the discussion panel all have these qualities. Those who have been nominated on the BOSSTrue Leaders list are from a broad range of sectors and, increasingly, several apply strong business skills to philanthropic projects.

A core part of the panel’s deliberations centred on the need for those at the helm to recognise the importance of Australia’s place in Asia and appreciate the significance of the region for future growth.

Panellist John Denton is on the advisory group for the white paper on Australia in the Asian Century and is on the board of AsiaLink. His board colleague Lindley Edwards stresses that this engagement is about more than business: it requires a deeper cultural intelligence.

“It’s critical to building a bridge, critical to doing transactions, critical to building business,” she says. “Business goes where the money is, it’s that simple, and if the money is moving West to East and there’s greater wealth in Asia, well, of course we’ll be moving our businesses there.”

Denton says the global economy has shifted from producer-led to consumer-led or client-led. “You see this extraordinary shift of economic authority,” he says. “If you start looking at longer-term projections you can see that, by 2030, 52 per cent of ­global gross domestic product will be in and around Asia.”

There’s still work to be done getting Australian organisations to bridge the gap between the rhetoric and reality of engaging with the region.

“You’ll see a company talk about their whole growth strategy being Asia-oriented and they won’t have anyone from Asia, or who has spent any time in Asia, on the board,” says Amanda McCluskey, co-head of sustainable funds at First State.

If you look back over the past 10 years, there have been very few companies that have successfully moved into Asia, says Charlie Lanchester, deputy head of equities at Perpetual.

“There have been a few, generally starting small and gradually building up their presence and picking a good partner,” he says. “But I think companies are more conscious now of how to do it and there are some signs that some of them are doing quite a good job.

“Mike Smith at ANZ, for instance, clearly has a lot of experience there. I like talking to him to get what’s going on in China. He’s one of a few people to have the access into China at that level and he has a vision of where ANZ needs to be in five or 10 years’ time. I think that’s probably somewhat different to the other banks.”

Short-termism is rife and hampers business, our panellists agreed. The speed of the technology cycle is playing a role in this, says McCluskey.

Lanchester notes that some companies are criticised for managing their earnings to very short-term targets. “One-year EPS [earnings per share] is how the market tends to value companies and often in the public-listed sector, you’re not having CEOs who are feeling confident enough to make decisions which might hurt their earnings in the short term but are strategically right.”

Aside from tackling the broad external factors, business leaders face a very different pressure from employees who now demand more flexibility and mobility in their careers.

The extraordinary success of the dotcom entrepreneurs has shifted expectations, with many younger employees no longer prepared to slowly work their way up the ladder, says Lanchester.

“People are rotating more and some have a higher risk appetite,” he says.

“You’re stuck in your boring job; there’s a certain level of frustration because you see Mark Zuckerberg, who started Facebook seven years ago and is now worth $100 billion – your options seem so much greater.”

McCluskey heard similar comments when she attended a Young Global Leaders forum held by the World Economic Forum last year. Many of the participants described what they thought success looked like and in almost every case, it was quitting a job at a big corporation.

“Success was getting out of there as quickly as possible because everything about big companies was stifling, it was bureaucratic, it was hierarchical, it was institutionalised.”

Source: http://www.afr.com/p/boss/true_leaders_asia_and_beyond_pp1kXGNlmr0fdZwV8RIKoL

See also: http://www.afr.com/p/boss/true_leaders_what_the_panel_said_QYEphydTDxl0Xh5GaFPTlN