Why Asian firms aren?t most admired
If you look at what gives organisations the ability to execute?transparency, accountability and opening leaders to criticism?Asian practices fall short.
Why do people buy Toyota cars? Why do they ship with FedEx? The short answer is, because FedEx and Toyota are good at what they do.
The other answer is, because their competitors are not as good at what they do. And if the competitors are Asian, the leading companies won’t have much to worry about.
Take a look at the 10 Most Admired Companies in the Hay Group survey (mentioned in the story on execution). Only one Asian firm makes the consulting firm’s list: Toyota.
What happened to giants like Sony or Samsung? Where’s Lenovo (formerly Legend), Haier or Acer? What about Tata, Infosys or Wipro?
Sure, you could argue that there’s a geographical or cultural bias in the mainly American survey. But if you look at the practices that give organisations the ability to execute, such as transparency, accountability and opening leaders to criticism—Asian business practices would fall short.
In one Asian company I worked in, there was a bullying leadership style. IT, finances and management decisions were a black box. There was vagueness in accountability (so blame could be pushed away but credit grabbed) and the succession chain was based on old-boy networks, not ability.
I’d guess many executives who work in Asian firms would share my observations. If the same survey on admired companies were held among your Asian country’s top executives, which would come out on top?
Would it be a Singaporean tech giant, a Malaysian oil refinery, a Philippine bank or a Hong Kong trading firm, do you think? I dare say the winners would still be Procter & Gamble, Citibank, FedEx and Visa.
What management principles has Asia bequeathed to the world—Sun Tze? Come on—let’s get serious. Japan created Quality Circles, but the idea came from an American. The much talked about Toyota Production System? It’s from an Asian firm, but it’s not a management principle so much as a shopfloor technique for maximising manufacturing efficiency.
Where’s Asia’s Six Sigma, change management or business process reengineering? Where are our Peter Drucker and Tom Peters?
Go against the grain
Of course, drilling the ability to execute into an organisation is hard. It goes against the grain of human nature. Leaders have to relinquish power to lower rungs. Protected turf has to be shared. Blame needs to land squarely on individual shoulders.
To put it in Asian terms: Sometimes, face cannot be saved. Resources are spent based on how they will benefit the bottom line, not as a means of bestowing favours. Problems in a project are not a source of shame; they are to be learnt from and fixed. Questioning authority is good. Protecting your rice bowl is not a valid principle for action.
In our story on corporate governance and regulatory compliance last month, top marks for a clear regulatory framework were given to Singapore and Hong Kong. But in Singapore at least, the execution part of governance—enforcement—was mentioned as still being weak.
Now, Enron and WorldCom put an end to the argument that all US multinationals are worthy. But the weird thing is, these firms had sound execution. Their executives had a plan—a criminal plan—and they executed it with typical American rigour.
Asian business DNA favours great entrepreneurs and charismatic, forceful leaders. It’s bad at helping firms take the world stage. Without sound execution, Asia’s top executives will still be admiring—and hoping to be employed by—Microsoft, Dell, IBM and FedEx for a while yet.