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HEC: Acquisition of Leadership Skills in Crisis Situations

by Thomas Kwon

October 16, 2014

Speakers:

Xavier Boute, Affiliate Professor of HEC Paris, Academic Dean Saint-Cyr Military Academy

Colonel Cyril Barth, CEO of Saint-Cyr Military Academy Foundation

What do corporate and military leadership have in common? According to Colonel Cyril Barth, CEO of Saint-Cyr Military Academy Foundation, and Xavier Boute, affiliate professor at HEC Paris and academic dean at Saint-Cyr, the overlap is clear. Speaking at the 2014 World Knowledge Forum, Mr. Barth said, “Leadership matters. The way we are leading our teammates is exactly the same. We’ve got to trust others and give them the chance to challenge everything.”

In considering the role of a leader, Mr. Boute posed the question, “What is the relationship between master and servant? Are you a member of the team?”

According to both speakers, there is a disconnect between book learning and practical application. To fill the gap, their academy puts current and future business leaders through a crash course in crisis management involving various simulated missions, such as building bridges, rescuing wounded squad members, and escaping confined rooms.

At first glance, the activities of Saint-Cyr may not seem directly linked to corporate leadership, but to Mr. Barth, this is precisely the point. He explained that for people to properly handle the unknown, they must practice outside of their comfort zone, regardless of context.

“There is a kind of pedagogical approach we have to deal with. If you are just teaching things, if you are just explaining in a room, you won’t be as understood as you can be if you let people do things on their own," he said.

Mr. Boute drove this idea home with a story about a civilian corporate trainee who approached him after what she called a “life-changing” session. After accomplishing an extremely challenging feat during a physically and mentally draining military exercise, she could not explain how she had completed the task. The key, Mr. Boute said, is that she was able to perform in the stressful environment, gaining valuable experience for future situations.

For Mr. Barth, the transformation and adaptation to uncertain circumstances is critical to leadership. He boiled the process down to three key aspects: decision-making, behavior, and empathy.

“If you don’t know what you want to do, if you don’t know where you want to attack, if you don’t know what market you want to win, you can’t ask people to work for you,” he said.

He continued, “If you’re telling what is right and wrong, if you’re explaining things clearly…it will be very, very nice for people. And if you’re not, well, they won’t get a word of what you’re saying.”

Adding to his colleague’s perspective, Mr. Boute shared his own thoughts on the necessary characteristics for leadership, strongly reiterating the themes of trust and teamwork.

“As an officer, I think a good leader has to love the members of their team. Then maybe it will make them work, it will make them work harder,” he said.

For their final point, the gentlemen stressed that leadership is about continuous learning and achieving tasks once thought of as impossible – or not thought of at all.

In spite of the numerous commonalities shared by corporations and armies, Mr. Barth made certain to distinguish the stakes.

“Time is money in a company. Time is life in the army.”

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The Opportunities of ASEAN Economic Integration

by Thomas Kwon

October 16, 2014

Speakers:

Eric John, President, Boeing Korea, Vice President, Boeing International

Siow Yue Chia, Senior Research Fellow, Singapore Institute of International Affairs

The Association of Southeast Asian Nations has a tight deadline to fully establish its ASEAN Economic Community: December 31, 2015.  In a presentation at the 2014 World Economic Forum, Eric John, president of Boeing Korea, vice president of Boeing International, and former U.S. ambassador to Thailand, and Siow Yue Chia, senior research fellow at the Singapore Institute of International Affairs, discussed the ten-nation cooperative’s progress thus far. 

“You don’t have any conversation about regional institutions in East Asia that don’t begin with ASEAN,” said Mr. John.

Dr. Chia began by highlighting the strengths of ASEAN.  She named robust economic growth, a young growing population with 60 percent under the age of 35, and an abundance of natural resources, among other things.

“ASEAN as a region has been very dynamic in economic growth, so the growth has been on average 5.3 percent since 2009,” she said.

Another boon, Mr. John added, is the fact of outside parties negotiating solely with ASEAN.  He gave the example of open skies agreements liberalizing strict rules in the aviation industry, which have resulted in projections that over the next twenty years, of the 36,000 airplanes sold globally, 14,000 will be sold in the Asia-Pacific region, driven by ASEAN carriers.

“With ten separate countries, it becomes very complex…the freedoms of open skies agreements have led to an incredibly robust market,” Mr. John said. 

Of course, ASEAN also has its shortcomings.  Dr. Chia outlined the widening development gap amongst member countries, limited governmental harmonization, and vulnerability to external shocks.  She believes that this can lead to increased fracturing and intra-regional competition.

To support her point, Mr. John cited Indonesia’s step back in governance in removing local Parliamentary elections, Thailand’s history of military coups, and allegations of widespread corruption in many ASEAN nations.

“You’ve got a plethora of religions.  You have ten countries, but dozens of languages.  You’ve got ten countries with separate economies, but that have a lot of overlapping competitive interests,” he acknowledged.

Overall, however, the two remain optimistic.

Dr. Chia singled out the ASEAN+1 free trade agreements with China, South Korea, and Japan as indicators of progress toward the four objectives of a single market and production base, a competitive economic region, equitable economic development, and integration into the global economy.

“There is some trepidation that we will not be able to achieve, or set up to achieve, but the general conclusion is we are moving in the direction,” she said.

There has also been encouragement from other sources.  Dr. Chia admitted, “We have been beating ourselves in the last few years ever since the ASEAN scorecard was published…but outsiders tell us, ‘don’t be so hard on yourselves.’”

Mr. John took a moment to recognize the value of even having such a cooperative in place, without which agreements and dialogue might not occur at all.

“I would say actually one great strength that ASEAN has is simply that it exists.  A lot of times that’s taken for granted,” he said.

In evaluating the accomplishments of ASEAN, Mr. John considered the alternative.

“Look at it in the negative.  What would it be like if there were no ASEAN?  Right now we argue about if the glass is half-full or half-empty with regard to ASEAN…but just think about if there weren’t even a glass?”

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The Population Shock: Aging Society

by Thomas Kwon

October 16, 2014

Speakers:

Baochang Gu, Professor of Demography, Renmin University of China Center for Population and Development Studies

Koichi Hamada, Tuntex Professor Emeritus of Economics, Yale University

HanGon Kim, Professor of Sociology, Yeungnam University

East Asia may have an image of youthful exuberance and fast-paced living, but the demographics within paint a different picture.  Baochang Gu, professor of demography at the Renmin University of China Center for Population and Development Studies, framed the issue as central to this year’s theme of invigorating the global economy: “We have to ask, ‘who are the people invigorating the economy?’”

Dr. Gu was one of three speakers at the 2014 World Knowledge Forum panel on the ramifications of aging populations in China, South Korea, and Japan.  Accompanying him were HanGon Kim, professor of sociology at Yeungnam University, and Koichi Hamada, Tuntex Professor Emeritus of Economics at Yale University.

The first two panelists relayed what they felt were the most impactful statistics.  According to Dr. Gu, China is not only the most populous country in the world, but also its oldest.  In fact, China’s elderly population alone would amount to the eleventh largest country in the whole world. 

“This is a demographic situation we’ve never seen before in the long history of Chinese society,” Dr. Gu said.

Dr. Kim compared South Korea with other OECD nations.  South Korea ranked dead last in the OECD in multiple areas, including fertility rate, expected newborn babies, and poverty percentage of the elderly.  In his eyes, this makes for a potentially toxic mixture.  At current rates, Dr. Kim explained, “The National Pension Fund will be drained by 2060.”

Dr. Kim continued, focusing on the near future. 

“In the shorter term, there are three scenarios that are solutions…an increase in women’s workforce participation, an increase in elderly labor participation, plus open doors to the foreign workers,” he said.  

Dr. Hamada added some insight on Dr. Kim’s first point. 

“In China, Korea, and Japan, women’s participation rate needs to grow…advanced countries have 80 percent or 75 percent,” he said.  He contended that if Japanese women worked like their Western counterparts, it would be akin to having 10 percent population growth, a huge jump.

To illustrate his view, Dr. Hamada drew on a time he was invited to a Japanese corporate meeting to give a speech. 

“Of 60 people or so, no women were there.  Instead, there was a shadow meeting of housewives of the executives…in the next room,” he said.  If deployed, he explained, those highly educated women would be an invaluable part of the workforce.

In the long-term, the panelists agreed on increased fertility as a potential lifeline. However, reversing declining rates has never been accomplished in advanced nations to date.   Nevertheless, Dr. Kim was hopeful.  

“The more important thing is to make a first move,” he said.

Dr. Gu also pushed for action, saying that there is an immediate need to combat the growing global problem of getting old before getting rich, suggesting that what we need is to be ready before it’s too late.

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Noni Purnomo’s Asian Womenomics

by Thomas Kwon

October 15, 2014

With the global economy mired in stagnant growth, many companies are trying to find a way to bring new energy into the fold.  At the 2014 World Knowledge Forum, Noni Purnomo, president director and CEO of Blue Bird Group Holding, Indonesia’s largest taxi operator, advocated for a solution that mobilizes half the planet: Womenomics. 

According to Ms. Purnomo, “We build the women community.”

Ms. Purnomo indicated that her inspiration comes from a personal place.  Mutiara Djokosoetono, her late grandmother, founded Blue Bird in the garage of her family home in Jakarta in 1972.

“Better opportunities for women to earn and control income could contribute to broader economic development,” she said.

Ms. Purnomo continued that fostering an environment conducive to participation would be vital in resolving the dearth of employment of women in comparison with men in Asia.  She discussed the various barriers for women, citing unequal education, income disparities, and the responsibilities of child-rearing.

She specifically posited that the biggest challenge lies in “the general perception of society.”  Indeed, of the 36,000 drivers at Blue Bird, only 500 are female.

To combat this, Ms. Purnomo underscored her company’s efforts aimed at women as “door-openers.”  They focus on education, offering various scholarships and vocational classes, and community-building, organizing groups living near each other to both socialize and talk business. 

“We need to be school-smart, and we need to be street-smart,” she said.

Ms. Purnomo explained the upside of more female presence and visibility.  In a twist on the classic saying, Ms. Purnomo said, “In the end, it is about the perception that everybody sees…two different types of heads are better that one.”

Reiterating the value of women in the workplace, Ms. Purnomo stressed that interpersonal skills such as empathy and compassion are an aspect where women often rate higher in studies than men. 

“We don’t have to try to be a man…and in the services industry, even though it is a male-dominated industry, apparently soft skills are still very important, and I think that’s the soul of our organization, that we care about each other, truly,” she said.

According to Ms. Purnomo, however, her goal is not to uplift women at the expense of men.  She supported this by saying that men are just as eligible to take advantage of traditionally female-oriented benefits, such as paid leave to take care of children. 

“I am not a feminist,” she said, “but I strongly believe in the equality of each person.”

Though she feels thing are trending in a positive direction, Ms. Purnomo recognized that much work still lies ahead:

“It takes time for a mindset to change…but it should not make us stop running.”

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Clash of Titans: U.S. vs. China

by Thomas Kwon

October 15, 2014

Speakers:

Akio Takahara, Professor, The University of Tokyo Graduate School of Law and Politics

Christopher Hill, Dean, University of Denver Josef Korbel School of International Relations

Michael Brown, Dean, The George Washington University Elliott School of International Affairs

Shen Dingli, Professor and Associate Dean, Fudan University Institute of International Studies

The rapid rise of China in the 21st century has thrown a wrench into the stability of the Pax Americana geopolitical system.  How the situation unfolds and is resolved is of utmost significance to Christopher Hill, dean of the University of Denver Josef Korbel School of International Relations. 

“I can’t think of a more important subject to [the U.S.], a more important subject essentially to anybody’s country,” Mr. Hill stressed, speaking at the 15th Annual World Knowledge Forum.

Mr. Hill was part of a panel discussing U.S.-China relations and concomitant regional and global impacts.  Accompanying him were Akio Takahara, professor at The University of Tokyo Graduate School of Law and Politics, Michael Brown, dean of The George Washington University Elliott School of International Affairs, and Shen Dingli, professor and associate dean of the Fudan University Institute of International Studies.

Beginning with the U.S. perspective, Dr. Brown maintained that though the U.S. has had a strong Pacific presence since the end of the 1800s, the Obama Administration has really signaled a shift in policy with regard to military security, economics, and diplomatic initiatives in the region.  He addressed a common misconception of U.S. strategy, saying that it is not about stifling China.

“Many people think that it is directed at China, when in fact it is focused on Northeast Asia, Southeast Asia, and South Asia,” Dr. Brown said.

Mr. Hill advised using caution in dealing with the changing power dynamics.  He spoke of the need for mutual multilateral understanding in terms of big business, diplomatic relations, and human rights.

“Even a small muscle twitch in foreign policy can cause unintended consequences,” he said.

Dr. Brown described the back-and-forth nature of the preference for the U.S. or China of surrounding nations, such as Vietnam, Myanmar, and the Philippines. 

“The dynamics here are pretty simple.  Big powers make smaller countries nervous…when big powers are rising and they start to throw their weight around, small countries get extremely nervous and they start to look for a big friend to help them out,” he said.

When it comes to China, the issue is more internal for Dr. Takahara.

“There is a growing gap between the words and deeds of Chinese government,” he said, adding that territorial disputes with China were a source of tension in the region, especially with Japan. Dr. Takahara believes China’s intentions would be paramount in determining the future.

Dr. Dingli advocated for fairness from China’s position.  He cited U.S. opposition to Chinese real estate investment and Japanese intervention in governmental sovereignty as not allowing China to fully flourish.

“The U.S. and Japan are less interested in reducing their percentage of the power,” said Dr. Dingli.

However, with the rise of China’s economic and political influence, Dr. Dingli emphasized the need for cooperation.

“China doesn’t want to change the world, but to improve the world…China, Japan, and the U.S. can do a lot, but they need to be humble.  They need to be confident that it is a race of concessions, not a race of assertive behavior,” Dr. Dingli said.

Mr. Hill agreed and hoped that good intentions would keep everyone on course. 

“Most Americans don’t wake up in the morning thinking we want to dominate the world,” he said.

In closing the panel discussion, Dr. Brown concluded: “Every country wants to have positive relations with both China and the U.S….They do not want to choose between the two.”

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The Winner of Internet of Things

by Thomas Kwon

October 14, 2014

Daesoon Hong, Vice Chairman, Arthur D. Little Korea

Heesu Kim, Deputy Director, KT Economics and Management Research Institute

Sanjay Ramesh, Managing Director, Cisco Smart+Connected Communities and Internet of Everything

The Internet of Things (IoT) may be the next iteration of the digital revolution.  Heesu Kim, deputy director of KT Economics and Management Research Institute, posed a new reality defined by the interconnectivity and smart automation of nearly all fields.  Hyped in recent years as the future, Dr. Kim declared about IoT, “The next big thing is fast approaching the current big thing.”

At the 2014 World Knowledge Forum in Seoul, Dr. Kim was joined by Daesoon Hong, Vice Chairman of Arthur D. Little Korea, and Sanjay Ramesh, Managing Director of Cisco Systems’ “Smart+Connected Communities and Internet of Everything.”  Together, the three discussed the impact of the IoT on multiple fronts.

Mr. Ramesh first spoke on the business side of things. 

“There’s a massive economic impact that IoT will have.  In fact, we have commissioned a study, and discovered that over the next few years, there’s almost 14 trillion dollars at stake,” he said. “That opportunity,” he continued, “is up for grabs.”

For his part, Mr. Hong believes in the enormous potential of IoT.  But to him, the problem in mobilizing corporations angling to get a piece of the pie is, “How can they get that money?”  He called on industry leaders, such as Google and Microsoft, to guide monetization with operating system technology.

The usual suspects are not the only ones getting in on the action.  Dr. Kim related a way to bring IoT into the household with an anecdote about Philips Lighting.

“They are doing a platform business with traditional products: light bulbs.  They’re adding an application program interface to their LED lights so everyone can create millions of colors, romantic moods, perhaps even the colors of the sunset from one of your favorite trips,” he said.

Further illustrating Dr. Kim’s point, Mr. Ramesh labeled his four pillars of IoT: people, things, data, and processes.  He recognized the leadership role of cities, specifically Barcelona, in realizing the connections between and amongst these pillars. 

“The city of Barcelona is actually doing a lot of interesting things with smart lighting, smart parking, etc,” he said.   These efforts, he contended, resulted in large tangible economic benefits to not only individuals, but to the community as a whole.

However, not all results are positive. 

“Technology always brings with it a dark side,” Dr. Kim warned.

All three panelists addressed real questions of security and privacy in the age of IoT.  Mr. Hong spoke about striking a balance between government regulation and promotion, to be able to protect what he sees as IoT’s main tenets: collaboration, sharing, and openness.

Furthermore, Mr. Ramesh suggested strong government policies as a way to handle the issues of privacy, liability, and the possible compromising of data.  He said the effectiveness of such policies would be a combination of “what people desire, and also what government will permit.”

Dr. Kim added, “Individual prudence in consumption will be required.”

All speakers agreed that the enormous potential value of IoT makes it essential to pursue, regardless of possible pitfalls along the way.  Dr. Kim challenged the limits of imagination itself.

“What we’re envisioning these days will be realized in the end, I believe, much faster than we think,” he said.

Mr. Hong concluded, “We have enough infrastructure.  That means we need to think of what kind of dream or what kind of world we want to make.”

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George Tanasijevich: Integrated Resorts and their Success Stories

by Thomas Kwon

October 14, 2014

When looking at colossal destination properties, such as The Venetian in Las Vegas or the Marina Bay Sands in Singapore, it is clear that the meetings, incentives, conferences, and exhibitions industry is booming.  At the 2014 World Knowledge Forum, George Tanasijevich, President and CEO of Marina Bay Sands, a leading name in the MICE industry, highlighted his company’s intentions for growth in Asia: “We try to create something that the world has never seen before.”

According to Mr. Tanasijevich, Marina Bay Sands’ parent company, Las Vegas Sands, believes it is well-positioned to capitalize on recent upward trends as the only integrated resort company with a presence in the three largest MICE markets: Las Vegas, Macau, and Singapore.  Mr. Tanasijevich explained that developing a network of relationships and a system of business practices would allow them to “move into new markets, understand the dynamics there, create a model that works specifically for that market, and then create tremendous value for the people of that community.”

Mr. Tanasijevich pointed to the importance of targeting travelers with money to spend.  “We bring in more high-end customers…so that everyone benefits from it,” he said.  With business travelers coming mid-week and leisure travelers coming mostly on weekends, he stressed the benefits of complementary travel patterns.

Addressing concerns that local businesses may have, Mr. Tanasijevich said the impact of such high-profile business properties would not greatly impact surrounding establishments.  Rather, he said, “We bring in new business that’s not already coming here.”

Mr. Tanasijevich said Marina Bay Sands does things differently, and was proud of the sheer size and fame of the attractions at his resorts. From hosting sold-out concerts with the Rolling Stones to bringing celebrity chefs like Gordon Ramsay to prepare dinner, he said that his resorts do it all.  Sands Live, the company’s newest concept, showcases some of the biggest acts in the world.

The numbers that Mr. Tanasijevich relayed show promise.  He touted a total investment of US $5.6 billion in Marina Bay Sands by 2015, along with the addition of over 46,000 jobs. Mr. Tanasijevich said, “We’ve added 1.25 percent to the GDP of Singapore.  That’s massive.”

With regard to his plans for South Korea, Mr. Tanasijevich had a message: “If you get serious about tourism…your upside is huge.”  He explained that South Korea’s population, land size, and cultural exports are all higher than that of Singapore, yet Seoul ranked ninth on a list of countries amenable to the tourist industry, compared with sixth for Singapore.

His strategy to improve Seoul’s position might sound familiar to anyone with access to YouTube: K-pop.  “K-pop is sweeping the world,”  Mr. Tanasijevich advocated.  He discussed the idea of using K-pop and other Korean cultural exports to draw foreigners in large numbers to South Korea.  “Really what this is about, is bringing in foreign tourism…bring their foreign currency, convert it to local currency, and spend that money here,” he said.

Emphasizing his desire to keep the meetings, incentives, conferences, and exhibitions industry booming in South Korea, Mr. Tanasijevich ended with a clear declaration:  “This is a top destination for our company.”