While global trade growth is slowing, trade between Asian nations is on the rise.
Large-scale projects such as China’s Belt and Road Initiative (BRI), the China-Pakistan Economic Corridor (CPEC) and the International North-South Transport Corridor (INSTC) are the new growth drivers. Dubai just launched its own Silk Road Strategy to complement BRI and secure its place as trade and logistics hub halfway between Europe and Asia. All this means greater connectivity between nations, more contact between its people and businesses, and more opportunity – provided there is a will to accept other norms, cultures and legal systems and to see advantages rather than obstacles.
I am writing this from the vantage point of a professional services provider with two decades in various Asian markets under his belt. At some point I realized I had stopped comparing. When you’re truly settled in a place, you are not constantly rationalizing and seeking answers to the many “whys”. That’s what consultants do who parachute in. Things are what they are. You’re free to focus on getting stuff done in exactly the way stuff gets done in these places. However, your experience from other markets validates your thinking and makes your judgment sounder. That’s a main advantage.
Before I delve into the details of localization and ACCESS, let’s take a brief look at the changing playing field.
The Asian Century is taking shape
Entire regions in Asia are modernizing while shedding their old image as the world’s factory of cheap goods. Ever more people are transitioning into the middle income group, driving consumption levels to new heights. As stated by the World Bank, China alone has lifted 800 million people out of poverty since the beginning of reforms in 1978 and aims to do the same for the remaining 45 million by 2020. Supply chains are expanding and trade with the rest of the world is at an all-time high.
The key number here is $26 trillion; the amount Asian nations must spend by 2030 to battle poverty, boost economic growth and fight climate change, according to a 2017 report by the Asian Development Bank. Their young and fast-growing populations (median age: 30.7 years) need more energy, better education and healthcare and decent jobs while ageing infrastructure, built decades ago for a fraction of today’s population is in dire need of replacement.
The spending spree is well underway. Cities and regions across West Asia (the Middle East), China, India, the ASEAN states and Central Asia are already investing billions, and it’s not just for replacement. As Parag Khanna writes in ‘The Future is Asian’, many are joining in the “largest-scale case of what economists call the advantage of late development, or ‘second-mover advantage’: “leapfrogging over traditional technologies or behaviors to the newest standards.”
With innovation cycles getting shorter, you would expect a degree of unease among the most affected groups. It certainly exists but the majority of Asians, especially the younger demographic, welcomes disruptive change as a sign of a better future. When “mobile phones come before landlines, digital banking before ATMs, cloud computing before desktops, electronic road payments before toll booths, and solar and wind power instead of oil and gas”, economic opportunity and real life improvements are suddenly within reach.
The pace shows no signs of slowing, despite uncertainty in global capital markets, environmental threats and geopolitical risks. The US–China trade war has negatively impacted Chinese growth but an end is in sight. The BRI is under increased scrutiny by Western media for the alleged lack of transparency while supposedly miring nations in debt and undercutting their sovereignty ("debt diplomacy"). But countering this perception will be high on the agenda when the second Belt and Road Forum convenes in Beijing in April. China has had a similar task at hand in 2001 and succeeded (see my article on how the Olympics could guide China in using soft power to overcome the issues that threaten the BRI’s success.)
Whatever uncertainty remains will put some investors off, but good business leaders understand that timing matters. If history is any guide, things will continue to move in the right direction. Asia makes for roughly 60% of the world’s population; ignore them at your own peril.
Getting Asia Right
So in essence, there is no better time to invest in Asia than now. The potential is unlimited and the risk manageable. Getting it right depends on the right mindset, the will to balance local customs with international best practice, and a firm commitment to identify and invest in the best people. I call all this ACCESS:
Each of those has the potential to make a lasting difference in any competitive environment, especially professional services (I am a bit biased here). Getting them all right is the gold standard.
In Asia, speed matters. Consumers, the competition and markets can change overnight. Plans change all the time, too. Money seems constantly tight and payments can take forever. Everyone expects the highest quality. Nothing is ever carved in stone but it just looks as if it were.
The way to deal with this is to make agility a core part of your organizational setup. You’ve got to be quick, anticipate events and develop strategies and processes to keep up with the high volatility of stakeholder demands, technological shifts and changing societal conditions. You need systems that accelerate the process of identifying options, spotting trends, putting ideas through a testing process to probe for their downside weaknesses. And you need to ensure that strategy and execution don’t diverge. That trait is closely linked to the next one: Can-do.
Creatives in the Middle East know what I’m talking about: “They’ve only briefed us today and now they ask for the video by tomorrow!” An absurd demand? Sure. But if you think this is the moment to walk away, good luck with that. The better option is to get on with it. Anyway, the correct answer is the one you would least expect: ‘consider it done’.
Can-do is a quintessential part of the Asian mindset. Being resourceful enough to absorb any blow from unexpected events. “No” is rarely the right answer, under any circumstances. You’ve either internalized can-do already or will have to adapt to it very fast. All operators are expected to deliver quickly, and the best way to go about it is to observe and learn how it’s done.
Whatever happened to 'don't act without a plan' I hear you say. When speed is synonymous with being future-orientated, business (as life) continues while we are making plans. The trick is to manage expectations, under-promise and always over-deliver. That requires some creative thinking.
Creative thinking and problem solving are closely interlinked. As I argued above, plans will change – they always do – but expectations don’t. The best way to prevent bad things from happening is to surround yourself with creative thinkers and doers who double as problem-solvers.
Think of your business as a brand and look for shortcuts to the hearts and minds of your clients and customers. While this applies anywhere in the world, it is even more significant for Asia’s young and brand-conscious consumers. That’s not to say all prefer Western or global brands. In fact, many more buy Asian, either as a matter of trust, national pride, or price. Young Asians are social media savvy and well informed while also looking for guidance. Brands that take a social stance can score big time.
The good news is that Asia boasts of creative talent as the recent Dubai Lynx International Festival of Creativity has shown. Go and grab them before the competition beats you to it. If you’re with me on that, you probably agree on the next one too: entrepreneurship.
Asia has emerged as an incubator of new ideas with entrepreneurs and enlightened governments actively promoting innovations in tech, healthcare, pharma, education and effective governance structures. Hundreds of accelerators have sprung up, from Beijing’s open working spaces in Zhongguancun to Malaysia’s Multimedia Super Corridor (MSC) and Dubai’s Future Accelerators.
If you grew up in Shanghai, Shenzhen, Chongqing, Singapore, Kuala Lumpur, Seoul, Doha or Dubai over the past ten to fifteen years, all this is normal or at least desirable as it creates the conditions for entrepreneurs, many of whom are Asia’s new role models. Think Alibaba’s Jack Ma. And there are many like him.
In the Asian Century, no one can simply rely on the old ways of doing things and cherry pick what, where, when and how change shall affect how we operate. Emulating Asian style entrepreneurism is a choice businesses make, and it’s a strategic one.
Asia’s complex and fast-moving environments make strategic planning a priority, under conditions that can be anything but favorable. But what’s the alternative? Chinese military strategist and philosopher Sun Tzu wrote "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." Likewise, if you sacrifice strategy for speed you’re running fast but without a compass. And if you sacrifice speed for strategy (i.e. never leave the planning stage) your competition will eat your lunch. Bottom-line: you’ll need both.
It starts with the resolve to overcome the apparent contradiction of having to act fast yet without cutting corners. Speed and the need for planning and real outcomes can be reconciled, perhaps not instantly but with some practice. The easier road is to stay tactical. Many settle for that but that’s a fool’s errand.
It can be done. As they say in Dubai: the art of the impossible is the new management paradigm. Hire people who think like you on that.
Companies are as agile, can-do focused, creative, entrepreneurial and strategic as their people. You would want employees who think and function along these lines; team members your business partners will trust because they are positive, thrive in high-pressure high-reward environments where the focus is less on procedure than outcomes, and will respond quickly and efficiently under all scenarios.
So go and hire local, encourage a culture of collaboration between empowered, self-organizing teams with flat hierarchies. Provide training (still a rare commodity and real game changer in many organizations) and compensate them decently. The loyalty you build will be priceless.
In my twenty years in Asia, I was fortunate enough to work with some of the smartest people in the communications industry, at all levels; people who ticked many if not all of the boxes above. A lot of them are still with the same organization, a rare thing in any fast moving environment.
Getting access is making all the difference, no matter where you are. Let me know what you think about ACCESS making a difference in Asia.