A Chinese proverb says that the best time to plant a tree was 20 years ago, but now is the second time to do so. The lesson we learn from this proverb is similar to the current situation in Asia. Leading companies have turned the changes caused by the Corona epidemic into an opportunity to create value in the future. Part of the reason they can do this now is that they have planted roots in the distant past and can have an agile, progressive, and decisive company in difficult and ambiguous circumstances. Another part of the story is that they plan their goals in the distance and move towards it with all their might and commitment. That is why when others are declining, they are on the path to growth.
The Asian corporate sector was in a difficult situation before the Corona epidemic. About 50% of the new global aggregate capital has gone to Asian companies over the past decade, yet the majority have lost their economic value, with some losing between 30% and 50% of their market value. Covid-19 has widened the gap between those at the top of the economic profit power curve and those at the bottom of the curve. This practice is expected to intensify in the post-Coronation period.
We (the Mackenzie Institute) spoke with about 20 of the leaders of some of Asia’s best-performing companies to find out what successful corporate governance and future building should look like in the face of an epidemic. These men and women, without exception, believe that the corona epidemic is a turning point that acts as a catalyst, not an accelerator. As a result, the disease has strengthened existing practices and led leaders to improve the performance of their companies. These CEOs say with confidence that the best years are ahead to strengthen their business and that their situation will improve with the future of Asia. There are five major practices that these Asian CEOs believe in in their companies.
1. Asia determines the future of Asia
It did not matter where the CEO company we spoke to was or in which sector he operated, he undoubtedly believed that a new theme of macroeconomics was emerging. Asia trades with Asia. Asian companies are completely interdependent and interconnected. The CEOs of these companies see regional governments as shareholders who have added value. Measures taken by governments in 15 countries in the Asia-Pacific region in November 2020 also reflect this belief by CEOs. All of these CEOs believe that the Asian market will grow in the not too distant future. They believe that the young and middle class population in the region is increasing, and as a result, market power will increase. “If you look at the state of wealth and consumption, you see that Asia is growing faster than the rest of the world,” said Pyush Gupta, CEO of Debussy Bank Singapore.
2. Digital data and innovations change the consumer path
Even before the Corona epidemic, Asian companies had the most advanced technologies and served their customers with the latest technologies. The epidemic has accelerated this dynamic process.
These days we are witnessing a change in online banking, digital payment, online commerce and the increase of “stay at home and do your own thing” category. Many business transactions are done through online platforms and social networks. Mackenzie’s research shows that the use of online shopping and commerce has increased in all countries during the Corona epidemic. Consumers in Asia are increasingly relying on online channels. In Korea, before the corona, people had become more comfortable with the digital world, and after the corona outbreak, older people turned to the online world for their daily activities.
The change in this area is dramatic. In Singapore, DBS Bank says it has seen a 400% increase in consumer use of its online tools during the epidemic. Other countries have experienced similar results. That is why the CEOs of Asian companies are looking for more investment in this field.
3. Large scale with a little local flavor, strengthens power
The epidemic has created opportunities for large and strong companies to grow bigger and stronger. Companies are looking for strategies to improve their capabilities and increase their size. CEOs believe that in order to balance the high-speed supply chain, it is better to look for purchases than to build. Large companies perform better in this area. Large size and scale help them to be faster. In addition, they have more flexibility and adaptability. Merger companies can also be a starting point. Merger can be like planting a seed. Being big, especially in a digital ecosystem, can be a huge advantage. It will be better to grow in these conditions.
4. The speed, agility and reliability of the running models will be optimized
Most Asian companies have been forced to do telecommuting to protect the lives of their employees. This flow has created new ways in people’s minds. Even CEOs are thinking about how to continue this practice after the epidemic has subsided. This has been a good period for learning. Based on this trial and error process, future capacities are also identified. A system must be designed that increases productivity in the long run. Of course, this is very difficult. This change changes the existing models that are running. CEOs have also changed the organizational structure and are more confident in their employees. They try to pay more attention to the concerns, worries and risks that threaten their employees. In this way, these people will be strengthened and will perform better. It is a human-centered management approach that prepares employees to move forward with the advancement of technology.
5. The goal is short-term and long-term
All of the CEOs we spoke to (at the Mackenzie Institute) insisted that their company’s goal had played an essential role in responding to the epidemic and paving the way for future progress. The same corporate goals during the corona helped companies prioritize different solutions. Leaders have also sought to help employees and suppliers find their way in critical situations. Most European corporate leaders say that their goal is to reach out to the whole community on a large scale. In this way, everyone who works in this company knows that he has a great responsibility that leads the country to its greater collective goal. Finally, it can be said that in adopting great and prominent strategies, it has helped these companies to make more progress in the corona situation.