The article is first published in SME Magazine November / December issue.
The rapidly evolving global economy often reminds us why Singapore needs to develop an innovation and knowledge based economy to remain competitive in the global economy.
Besides investments in capital growth, production, innovation through research and facilities, companies also need to develop competent leaders who can lead their businesses to seize growth opportunities.
At its helm, are business leaders whose company’s ability to survive will therefore depend on their ability to plan for succession. With rapid economic change more often the constant than stability, companies are realising that they cannot wait until tomorrow to develop leaders.
I believe that the skills for leadership can be learned, complemented by hard work and experience to acquire other necessary skills to understand the business.
In other words, most people have the potential to become effective leaders. What then, are some of the common traits of good business leaders?
First, it must be a passion for the business.
Good leaders today often have a vision for their companies and are driven by a passion for the work they do. Resilience, tenacity and unconventionality are three words that may best describe a great leader in a world of opportunity.
Many also realise that increasingly, company profitability alone will not define their company’s success. The measure of the positive sustainable impact their companies have on the community is as important.
There are several other traits that I have also observed in my experience. These include a good grasp of local market conditions, the ability to develop talent and the ability to encourage innovation in their ranks.
Grasp of market knowledge
Good leaders understand the realisation of a good strategy is in its execution. This means having both a local and global outlook to their business, and adequate local market knowledge.
This market knowledge must be combined with a sound understanding of their organisation’s capabilities so that the right business model is chosen.
At the same time, their companies must remain nimble in order to respond swiftly to evolving market forces, operating environments and the opportunities that arise.
They must have the resilience to see their plans through. Says Ms Voo Choon Ling of Woodlands Transport, "A leader must be able to hold the fort and set the right business directions. He or she must show business acumen in the face of crisis and challenges."
Growth into value
Creating an environment that continuously challenges the thinking and quality of decisions individuals in the organisation make is also important.
At the same time, continuous innovation is necessary to differentiate your company from others by finding new ways of adding value to your customers. Innovation has to be encouraged, accountability required and mistakes within acceptable boundaries, tolerated.
Businesses that have successfully undertaken innovation initiatives have done so by providing strong leadership in an environment of trust and openness.
This will allow and empower change, so that everyone in the company feels the desire to accept the responsibility and understands that innovation will reward everyone.
Right people in the right environment
Local family-owned enterprises that we spoke to tell us that they often struggle to make the transition to a new generation’s style of leadership.
A business leader is often successful not by an individual effort, but also because of the team that supports him or her. They must have a strong team, committed colleagues, or robust organisational support.
The management team must comprise of individuals who are leaders in their own right with a shared vision for the company.
Besides recruiting talented people with the right skills and attitude, it is therefore essential to put in place policies to employ a diverse range of people and skills in the company. Greater diversity often results in decisions of better quality.
Leaders should listen more to people in the organisation at all levels and from all areas.
Talented individuals must be empowered, and given every opportunity to experience the culture and understand the values that drive the organisation.
Don’t underestimate the importance of spending the time to build a cohesive leadership team through training, team building and other efforts in developing your people.
Leadership must also consider regional growth opportunities
Successful leadership is even more important for Singapore’s companies who are thinking of expanding abroad.
With the expected economic boom in the Asia region, pressures that companies face to compete will make it even more important to identify and prepare future business leaders.
However, no two Asian markets are identical. Countries in Asia embrace a wide diversity of culture, stages of economic development and business conditions. Business cultures can also be unique in each market.
It is therefore important that business leaders take the time to develop deep local market knowledge where they intend to operate. This can mean the difference between being squarely at the heart of emerging trends or settling for being a latecomer to the game.
Leaders should therefore take calculated risks and have the courage to make difficult decisions. They also have to attract, develop and retain talent to ensure that people with the right skills are in the right place and at the right time to meet business needs.
This article is contributed by Mr Chiu Wu Hong, Head of Enterprise Advisory at KPMG in Singapore. The views expressed are his own.