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keeping companies from pursuing suitable market opportunities. In that context, it is imperative for business leaders to sustain unique abilities in teams which can turn strategy to reality.
To share with the Managing Accounting (MAs) fraternity the developments in this area and what can be expected in this regard in the years to come, the Chartered Institute of Management Accountants (CIMA) hosted its Business Leaders’ Summit 2014 under the theme ‘Sustain Ability: Imagine. Implement’.
The conference that was held this week, took place over two days where six eminent business leaders from around the world shared their perspectives.
The conference, which comprehensively dealt with sustaining ability, explored ways in which organisations could develop leaders who are not only visionaries but also as those who execute and translate strategies to action at the right time, which individual abilities are critical to thrive in today’s technology driven complex and volatile market economy, how strategies are required by companies to sustain and develop such abilities, how leaders can inspire teams and thrive in volatile markets and what roles can government leaders’ play in developing economies which will help optimise national capability.
Winning strategy for emerging markets
Focusing on frugal innovation, National University of Singapore (NUS) Department of Strategy and Policy Associate Professor Pasha Mahmood said that if by 2025 86% of the world’s population would be from emerging markets, which will comprise of 40% of the youth, 52% of the GDP, and 45% of the middle class, it would certainly be a time of great opportunity for companies from emerging markets.
“What makes money is not always beneficial for the people and what is beneficial for the people will not always make money. We need to come to terms with the expanding population and no one has come up with a way to make money in a good way,” he said.
The world is going through an organisational revolution where people are moving from the country side to the city and now the definition of middle class differs from country to country. “You have to think about the right price point. The middle class is growing in India and China but it is not the exact middle class. Even if you get the price point right, the needs will be quite different,” he said.
Looking at value innovation, this element alone is not enough to drive corporate in emerging forward, thus has to be coupled with required infrastructure.
A common issue with innovation is that soon after, or even before it is commercialised, many attempts are made to replicate it. To succeed, it is necessary to combine the product with the business delivery system, which will help achieve sustainability.
“By adding a value proposition for your innovation it becomes more appealing for the consumer to purchase it. At the same time you need to understand your customer’s problems and figure out on how to unclog your business delivery system,” expressed Mahmood.
It is necessary for organisations to know the need of the product in different localities before addressing the supply challenges. “You need to understand where the clogging is and there is a need to go and intervene,” he added.
Before going global, one needs to win the local market since loss in home market will eventually be a barrier for growth overseas. So how to win? This can be done by focusing first on the product side. Focus on providing what people want and not what that company wants. Organisations should then address the delivery side so they could scale it up.
“You need to get the basics right. And once you get that right, in an international level you will simply continue to do the same. However, to do all of these, resources are needed and this is where the government comes to play. If you do not have the ecosystem, you will have to do it yourself and not everybody can do it. Only big groups can do it. If you are a small medium size enterprise you need to work with others to come up with the eco system,” advised Mahmood.
From energy to synergy
Attempting to shed light on the practical art of converting individuals to teams, Corporate Strategies Jamaica CEO Aubyn Hill widely explored on ways in which success in teams can be achieved.
Acknowledging that today’s teams form around team leaders who are called managers, divisional heads, CEOs, priests, swamis, bishops, team captains, entrepreneurs, and revolutionaries, Hill, who is a product of Harvard Business School having over 26 years of experience in the banking and finance industry as a senior executive and CEO, explored the reason as to why teams are typically formed.
According to him, teams are formed because the simple truth is that there is very little that we can do by ourselves without the help of somebody else. He who wishes to secure the good of others has already secured his own, he said, recalling the wise words of Confucius.
“If I am going to look my own, even if we don’t want to accept it, it is the truth. We form teams because teamwork builds trust, 
which builds speed. Through speed comes effective and efficient performance which leads to accomplishments,” shared Hill.
Sharing the words of another wise man, Management Guru Peter Drucker, he said: “Leaders who are more effective never say I, and it is not because they have trained themselves not to say ‘I,’ they don’t think ‘I’. They think ‘we’ and understand that their job is to make the team function. They have self responsibility and don’t sidestep that responsibility, and ‘we’ gets the credit. This is what creates trust, what enables you to get the task done.”
While talent wins games, team work and intelligence wins championships. Champion teamwork has to be built and a well on team just doesn’t happen. “It is inevitable the idea of the objective of someone. Sometimes of a few persons with the passion for the idea or the objective who possesses some special key skill brings the idea to life. If you are working with a team, sometimes you have to make a call that doesn’t go your way. This saves your company, or sometimes even your country,” noted Hill.
When looking at teams, one also looks at what self interest is all about. And when exploring the subject of converting the energy, the thoughts objective and the ability of the individual in a seamless sustainable team may to lead to disregard the interest of the individual in favor of objective goals and benefits of the team.
“The temptation of the collective good is completely submerged and even demolishes the aspirations of individuals. Any manager should think that if he is going to be successful, then he should ensure that his team is successful. Ensure they have the necessary resources, that they are empowered and confront the leader. Good teams work that way,” hill noted.
Reframing human capital for sustained competitiveness
Presenting thoughts within the theme ‘Arising Asia’, Microsoft Corporation Singapore Regional Director Dr. Astrid S. Tuminez noted that what is being witnessed in the region is truly unprecedented. From 2000 to 2010 developing Asia has been responsible for nearly 54% of growth in world GDP.
Touching how Sri Lanka can move forward, Tuminez opined that technology is a great tool for empowerment. With the country starting from a very low base, there is an opportunity where technology could be deployed to help leapfrog some of the phases of development.
“Connectivity can be enhanced by the Government with the participation of the private sector to create a space to share ideas and establish connections. Technology can also provide a massive advantage for the SMEs to do their accounting, marketing and increase the number of employees and in return, increase revenue,” she said.
Diversity and Inclusion (D&I), which is underpinned by a lot of research, shows that the more diverse the workforce, the more diverse teams, the more effective and faster they become in solving complex problems. For every organisation, every team and every nation, diversity is the factor that should help drive value in the 21st century. “By acknowledging these diversities and deploying them we are including people to contribute their fullest potentials,” she said.
Asia has come a long way in terms of women leadership. Today we see a lot of Asian women amongst the most richest and powerful in the world. There are also instances in the South East Asia, where it does better than the G7 wealthy countries in terms of putting women in senior management. “Women have a different kind of risk appetite and a risk profile. When women participate in the labour force the society is benefited,” Tuminez stressed.
According to Tuminez, for a country to sustain competitiveness it has to be informed and be grounded in ethics and values. “We are challenged by inequality, violent conflict, environmental degradation and we see natural disasters. How we go about resolving these depends on how the human capital can be grounded in ethics and values.
“A lot of ethics and values we preach come from the West and we need to think as to what do we have ourselves. What are our own roots that come from family, the village we lived in, by our religion and leaders and should look at ways in which we can leverage these values,” said Tuminez.
Standing tall during testing times
Speaking about Pakistan’s largest homegrown multinational corporation (MNC) which stood tall in its texting times, Engro Corporation Pakistan CFO Naz Khan shared the story of her organisation where it successfully sustained the ability to grow in a volatile, uncertain, complex and ambiguous environment.
Introducing the audience to a new word ‘engrobility,’ Khan said it describes the essence of what Engro does. “It is the essence of unique ability that touches lives everywhere, the ability to improve lives, empower livelihoods and inspirer meaningful change. Taking together our values, we believe ourselves to be a reliable, trustworthy patriot, who is a force for good with the ability to enable excellence. These are not just words, it has a very powerful meaning,” she expressed.
Providing a snapshot of the company’s history, she noted that the company initiated in 1957 as ‘Esso’, a urea plant which later led to a fertiliser plant agreement signed in 1964. In the subsequent year, Esso Pakistan Fertilizer Company was incorporated with 75% of the shares owned by Esso and 25% by the general public.
While the construction of a urea plant commenced at Daharki, Pakistan, in 1966 and production began in 1968, a full-fledged marketing organisation was established, which undertook agronomic programs to educate the farmers of Pakistan. As a result of these efforts, consumption of fertilisers increased in Pakistan, paving the way for the company’s branded urea called ‘Engro,’ an acronym for ‘Energy for Growth’.
In 2009 plans were announced of demerging the fertiliser business into an independent operating company. Engro Fertilisers was incorporated in June 2009 to manage the fertiliser business post demerger. To reflect the change in the scope of mandate and scale of operations, Engro Chemical Pakistan Limited was been renamed as ‘Engro Corporation Limited’ in 2010.
However, while the company was aspiring to reach great heights, certain incidents in the country’s macro environment threatened the business around the year 2011. But despite issues and challenges faced, the corporation which truly takes into account its values managed to more than survive, by taking care of all of its stakeholders.
Given the bleak situation of the company, Kahn said that Engro could have pushed for very unreasonable terms for its lenders, and asked for a partial write-off of debt for equity conversions but instead, it carefully planned its internal measures and took care of all of its small investors and bilateral loans of small banks.
“We had started 2013 with an implied value of zero for our fertiliser business but by June we had completed our restructuring and by December 2013 we had listed the company successfully with three times over subscription and a market cap of over $ 700 million. The important thing here was the philosophy that we used to implement. If you want to continue to operate and continue to sustain, it is how you deal with your good times and your bad times,” she said.
Having taken care of the organisational health, it continues to focus on the financial health where certain KPIs were looked at.
“We worked on our employ engagement index, talent acquisition, and development. We launched a program called ENVISION which worked around volunteering. We found that this was a good way to improve employee engagement. It also connected people to society at large in many cases to the value chain,” explained Khan.
The results of the measures taken were that Engro completed its year with the highest ever top line and bottom line growth. It got a two notch rating upgrade and a shareholder return of 72% against 49% on the Karachi Stock Exchange. “When we reflect on what has allowed us to survive and thrive, it has been our belief in our core values. Core values have to fit like a glove because it 
must be something that we believe from within,” noted Khan.
From existence to excellence
Sharing the administration oriented elements of Samsung, along with its features such as the functions, status and culture of the organisation, former Managing Director of Samsung, Singapore Joowook Chun during his presentation shared the management style of on Samsung’s late Chairman, Byung-Chull Lee along with instructions and orders that helped uplift the institution.
In addition to the leadership story of Lee, he spoke on key strategies used by Samsung Chairman Kun-Hee Lee that helped continue the company’s legacy.
Furthermore, he touched on the new management and administration practices embraced by Samsung and its critical success factors, while not leaving out pointers for business leaders as how they can make their organisations as successful as Samsung.
“If your company wants to succeed in the management innovation, it should match the CEO’s character and the organisational culture. Otherwise, even if you follow exactly General Electric’s Six Sigma or Samsung’s new management model, you will most definitely fail,” he told audience.
Noting it is imperative that innovation should match the characteristics of the product and the business, he openly shared that not all of Samsung’s subsidiaries have succeeded with the new management model
“You must have a Management Control Organisation (MCO) that shares the same direction and a strong loyalty. It should not have a coercive attitude, instead it should be helpful and supportive,” he said.
Along with this needed is a stable cash cow since innovation needs money. According to Chun, if an entity wants to surpass the SME status, it should set up to an organisational structure that checks on and compete with each other.
Furthermore, if one aspires to succeed, it is best to use a management advisor instead of a consultant. He identified that the limitation of a consultant is that he lacks or does not have field experience.
The final mantra for success he said is the need of sufficient time in fortifying the business. “There are many cases of failure when new chairmen try to undertake innovation right away. It is always best to give time,” he said.
Pix by Daminda Harsha and Lasantha Kumara
