RECESSION SEES MORE DEMAND FOR INTERIM MANAGERS

SINGAPORE FIRMS SEE THIS AS GOOD SOLUTION TO TIGHT STAFFING.

Singapore firms keen to keep costs down in these grim economic times are more willing to sign up key finance professionals on short-term contracts instead of hiring pricey full-time staff.

Such hired guns can be taken on for specific periods to boost the existing talent pool. Aimed at specialized tasks and then let go when the job is done. That means more bang for the corporate buck and fewer high-priced executives sitting around twiddling their thumbs in a slow economy. Firms here see it as a viable alternative to soaring human resource costs amid challenging market conditions.

Deploying immediately available contract staff to work on certain projects is a flexible, strategic staffing solution in these current economic times. A recent survey of finance and HR managers showed that 52% of Singapore companies see hiring senior-level finance professionals on contracts as a good solution in a slowing economy. Hong Kong was second on 46% with Brazil next on 37%.

Overall, about 88% of the companies polled in Hong Kong and Singapore said they will hire senior contract professionals, compared with just 29% in Japan, 64% in Australia and 68% in Britain.

These professionals include finance directors, account managers or interim finance controllers. They are typically hired for shorter term jobs where they manage or support companies through transitions, change or crisis management. Aside from costs, hiring interim professionals means companies gain immediate access to specialists skills and experience. Moreover, interim managers usually bring a large measure of objectivity to their projects as they have no vested interests, unlike regular employees.

(The above is excerpted from Straits Times December 11, 2008, Singapore)

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KNOW WHEN YOUR TIME IS UP

INSEAD DEAN SAYS THE DEEPENING ECONOMIC CRISIS HAS SHOWN THAT CEOs NEED TO PASS THE BATON EARLIER

Five years is the ideal length of time any chief executive should serve in the not seat, according to the dean of the INSEAD business school in Singapore.

Mr. Frank Brown thinks company chiefs should not cling to their position for any longer than seven years – and that five years is really all they need. “Five years will do for a CEO. It is enough to do what he has to do and get out,” said the 53-year-old, an accountant by training.

“When you look at the credit crisis and some of the colossal failures such as Lehman Brothers and Bear Stearns, you’ll find that in each case the CEO was in place for many years, in some cases more than 20 years. That creates a situation where the CEO surrounds himself with people who will listen, as opposed to challenge, with people who will probably be about his age or older and therefore not capable of succeeding him.”

This June, Mr. Brown will have served three years. So by his own reckoning, he should have only two more years left at INSEAD. “It keeps you fresh, keeps you engaged and energized and it also gives others a chance. The last thing you want is a high-powered person to join an organization and then realize that there’s no place for them to go, because everybody else is just holding on to their jobs.”

“If you’re lucky enough to make it to the top, your sole objective shouldn’t be to stay there. Your objective should be to bring somebody along behind you who can succeed you, who can take that organization even further than you did.”

He also thinks CEO bonuses should include a back-end payment, given only after the successful transition to a new leader. The CEO should be motivated not for the level of earnings in their last year, but by the continuing success of the organization. Right now there’s an incentive for the CEO to load up the P&L with all kinds of good stuff in their last year so they can leave with multimillion dollar payouts.

Mr. Brown notes that Asian leaders tend not to follow this line of thought. Many remain in their positions too long, especially if they have been successful in growing a company. “Times change and you need the injection of new ideas. The same formula is not going to work over and over again.”

To reduce the number of long-in-the-tooth CEOs and encourage succession management, he is a keen advocate of bringing back into vogue “servant leadership”, an  approach developed by the late Robert Greenleaf, an executive with AT&T. Mr. Greenleaf’s 1970 paper on the topic became a seminal piece of research and was taken up by management gurus such as Steven Covey, Peter Block, Peter Senge and Margaret Wheatley.

Mr. Greenleaf wrote in his essay that servant leaders have a desire to serve first. “That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions,” he said in his essay.

The concept should not be alien to Asian leaders, points out Mr. Brown. After all, the Chinese sage Lao Tzu, founder of Taoism, is credited with the same concept when he remarked that “the greatest leader forgets himself and attends to the development of others”.

Mr. Brown breaks the concept down further. Servant leaders, he says, are those who consider the needs of employees, the needs of the communities in which they operate and the long-term needs of shareholders. “You can develop strategies for the long-term good and prosperity of the organization and also play some role in the long-term good and prosperity of society at large.”

This takes INSEAD’s dean to a favourite topic of his - TRANSCULTURAL LEADERSHIP - a subject on which he wrote a book two years ago. In The Global Business Leader: Practical Advice For Success In A Transcultural Marketplace, he highlights the importance of building bridges and leading across cultures, geographies and other traditional boundaries.

So-called “Transcultural leadership” is a style of running a company that crosses national borders. It is seen in leaders who combine the best practices of traditional business leadership with an understanding and sensitivity of the world’s many cultures.

Mr. Brown has plenty of anecdotes to illustrate why this ability is becoming essential. He recalls an incident when he was leading a team of 20 people of at least 15 nationalities to launch a new multinational venture. Among the key issues discussed at a meeting was the venture’s name.

Just as he was about to wrap up an otherwise smooth meeting, he asked each participant how they saw the venture working in their specific market. That was when a quiet participant from Japan piped up that the chosen name meant “your ugly sister” in his part of the world. “He spoke up rather late, but he did and we managed to avert a major public relations disaster,” Mr. Brown recalls.

Another example concerns a Japanese company looking to buy a division of an American firm. It was reluctant to make an offer because the its valuation of the business was way below the seller’s expected price. The Japanese thought the Americans would be offended by the lower bid, but the Americans assume the Japanese would make a bid and then negotiate. The deal might have benefited both businesses, but ignorance of cultural differences meant that it never happened.

So how do business leaders nurture a transcultural ability? Mr. Brown suggests that they get out of their cultural comfort zones as much as possible. “When abroad, go to the local market instead of the supermarket, go to the local barber for a haircut. I have been to barbers in France - it’s a riot,” he says.

“When you take a taxi, talk to the taxi driver. I took a taxi the other day in Singapore and he asked me how much I made as boss of a business school. Each transaction will teach you something about the culture you are dealing with.”

Aside from promoting transcultural awareness, another important piece of advice he has for current and future CEOs is: Surround yourself with bright people willing to challenge and ask hard questions. “I tell my kids if it looks too good to be true, it is. So ask questions until you understand it,” he says.

Unfortunately, Asian executives can be reluctant to ask their bosses tough questions. Mr. Brown accepts that part of this is cultural, but maintains that one can still put forward a different view politely. “If there’s one thing the current crisis has shown us, it is that you must be open to challenges. That’s the only way you can improve service, product or communicate it better,” he says. “You need workers who will ask why or how. Workers who will say, ‘how can you guarantee a return of 12% infinitely? It’s just not possible’,” he adds.

Challenging a long-serving CEO is often more difficult than challenging a relative newcomer, which brings him back to his pet topic - a time limit for CEOs. He makes clear that he is not suggesting that CEOs should be consigned to the rubbish heap once their five or seven years are up. Their experience is a valuable asset for any company. If they have been successful at growing a company, they can always repeat that success elsewhere. Citing the well-known leaders of General Electric and Microsoft, he says: “Imagine if someone like Jack Welch had left GE earlier, instead of staying there for 20 years. He could have gone and built another GE.

“Better still, someone like Bill Gates who has been so innovative in building Microsoft. Now he is putting his energies to solving problems in education and health through his foundation. I am sure he will effect some powerful changes that will be transformative - now that’s servant leadership for you.”