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Time to work harder and smarter
Bangkok Post 5 March 2007
NINA SUEBSUKCHAROEN
With operational risk rising in a climate of political and economic tension, companies are now looking for better quality revenue generators, and this in turn will require better quality managers, according to Anthony Ainsworth, the head of RGC Executive Search.
Moves to amend the Foreign Business Act, the ongoing Shin Corp saga and strained Thailand-Singapore relations have all soured the investment climate, sapping confidence and prompting foreign investors to consider other options, he said.
"[Thai government officials] would be churlish to believe that they don't need foreign investment," he said. "Every country in the world needs foreign investment, but you can't expect foreigners to come here and just give you 50% of every hundred they dump in. I mean, China has started to become a lot more open, giving fully-fledged licences in areas where Thailand might feel that we need to have Thai ownership."
Chinese sectors opening up to foreigners include retailing and insurance, with an international insurance broker having just obtained a licence for a 100% foreign-owned business.
"I think you have to look at what your neighbours are doing. ... It's a vicious old world and Vietnam has traditionally been more of an attraction for north Asian countries - the Koreas, Japans and Taiwans - especially in electronics."
In a market affected by enhanced political and operational risks, it is now tougher for companies to acquire the talent they need to drive their businesses at a time when they need better quality people to generate revenue.
Key recruitment issues include whether the corporate brand is tier one or tier two; the actual position the company seeks to fill; and finally the pay. All of these weigh on good candidates and would-be employers, in Mr Ainsworth's view.
"So there is a lot more focus on all three - brand value, is the position good enough and attractive enough to make a move in a high-risk period, because who knows how this company will fare in six months? Is it going to be nationalised or potentially, the worse thing, could it go bust? ... Could the international parent say, 'Well, actually we're going to divest in Thailand and shift the production centre either to Vietnam or China."'
For those reasons, he says, before companies make a high-profile hire they have to be very certain about what the goals for the position will be. "Good quality candidates aren't necessarily looking for a job, the onus is on the company to really get the sales pitch."
Because companies are seeking better quality revenue generators, managers who did fine during a market upswing might be finding conditions tougher now because they have to be smarter and tactically sharper aside from working harder.
"The focus is on revenue, not so much back office, so you need really strong sales and marketing professionals who really operate at the strategic level, set the plan, oversee the operation, that's the challenge," said Mr Ainsworth. "Oftentimes you get too many people who are good at executing the plan but can't really devise the plan for the actual market."
However, the current environment is a good one for companies and individuals who are leaner and can adapt more quickly to move ahead. "It's the sailboat versus the supertanker approach. I think that will present opportunities [for] people who can change market conditions quicker, understand consumer behaviour a little bit quicker and react to it."
Those who are perceptive will realise that consumers are much more value-driven now and this is going to hurt some of the middle to premium segments.
Mr Ainsworth does not expect companies to be in such dire straits that they would start looking at layoffs, though some people might be asked to leave due to lack of performance. "I think a lot of companies might feel they have a fairly full headcount."
However, Mr Ainsworth expects Thai SMEs to struggle to be competitive, though bigger corporations should do well.
While a lot of people are hopeful that the situation will improve once the constitution is drafted and a new election takes place, Mr Ainsworth is pessimistic. Even if there is an elected government, he says, nothing will change for at least six months because it will probably be a coalition, meaning the usual jostling for positions and influence. "So really we might be in the same scenario in a year's time - we might even be worse."
What has emerged from his discussions with foreign executives is that the Japanese are apprehensive. "The question is, if you are not here why come here ... when you have other options? If you are here, do you invest more, put some [investment] in another country, or divest?
"Now, I heard a story that one of the big automotive companies has put a big investment on hold because you can't keep playing around with ownership of capital without expecting consequences. There is plenty of capital in the world but it wants to go to favourable homes."
Mr Ainsworth also noted that investment decisions usually take two to three years to take effect. The situation might seem fine today but some foreigners, especially the Japanese, are very deliberate and their investment programmes today are based on decisions made from one to three years ago.
"So the question is what is going to happen in 2008, 2009, 2010? The Japanese are typically quite slow in assessing [conditions]. They want political stability, they need to know the investment environment." |
