Building 21st century companies in Asia

| Video

What is it that makes the role of the CEO more important than ever now?

The role of the CEO has always been important, but I think it is even more so in the times we live in now. I’d say this is the case for a couple reasons: firstly, this is a once-in-a-generation crisis that we’re living through. I think CEOs have the complex task of being able to navigate what is defensive, what is offensive, and how not just to recover but also thrive after the crisis.

Second, I’d say the stakes have never been higher. You have to see to your organization’s stakeholders, and the government expects you to be more responsive to the environment. Customers are also expecting you to be more digitally savvy and to provide a seamless experience. And frankly, your talent is expecting a lot more out of their work; they want to have that sense of belonging and a sense of purpose. I think these factors make for a very interesting set of challenges for CEOs—not just being able to perform, but also to lead with character.

How can CEOs execute their vision effectively in a post-pandemic era?

I think the rules of the business are changing, and I’d like to point out a couple of phenomena. One, I think there is the race for scale. If you look at the top 50 companies in the world, their profit represents and collectively drives about 1 percent of GDP. That’s three times bigger than in the past, and one-third of the world’s market cap. So, there’s surely a race for scale.

Second, I think there’s a race for speed—speed is becoming a competitive advantage. We’ve all seen in COVID that we could do things much faster than any one of us anticipated, and there’s an opportunity to make that a part of the DNA of the company. So, speed becomes important.

Third, I think customer expectations have gone through the roof. They have seen what digital can do, and I think customers expect companies to be much more digitally savvy and to provide a much more seamless customer experience.

Lastly, I think there’s a race for transformation and M&A activity in the market. This year, we expect to have $5 trillion of M&A activity in the world, and not participating in that leaves a lot of companies exposed. So, I think execution is a lot more complex now than it’s been in the past.

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What are some challenges and opportunities that are specific to Asian CEOs?

I’d say there are a couple of things quite unique about Asia, the first being that the opportunity here is so large relative to the talent we have. There’s a massive gap between the opportunity and the supply of talent, so one big challenge is constantly thinking about, ‘How do I recruit, develop, and retain more talent to be able to do all these things?’ I think that’s a big CEO topic, particularly in this part of the world.

Second, in many industries—take telecom as it moves to 5G or sustainability—a lot of it is not about reformatting legacy businesses, but building new businesses. For example, take a digital bank. More digital banks are being born in Asia than anywhere else. If you look at sustainability businesses, I think more green businesses will get built in Asia than in other parts of the world where a lot of it is about retrofitting. So, the mindset to build a new business is quite different from improving an existing business.

The third CEO challenge is just the pace of digitization. If you look at two countries in Asia, India and Indonesia, these are two of the world’s fastest digitizing countries in the world—as far as the number of people that are coming onto the internet, and the amount of consumption. In fact, $1 in every $2 of global consumption in the next ten years is going to happen in Asia.

Being prepared for this whole boom that’s happening along with rapid digitization, it’s important to consider: ‘How do you serve the needs of current and future segments of customers?’ For example, single-person households or the senior demographic—these segments are going to become hugely important in Asia, and companies need to think about how to meet the needs of these different customers.

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