Thailand's economy, hit hard by the pandemic, is predicted by the World Bank to take approximately two years to recover. Living through periods of great uncertainty and rapid change is unnerving for us. But, around the world, leading companies are using pandemic-driven changes to position themselves for future value creation. Our latest research shows how business leaders across Asia are doing just that, offering insights for those looking to guide Thai companies in a post-COVID world.
To understand what it takes to manage successfully through the pandemic while building for the future, we interviewed around 20 leaders of some of Asia's top-performing companies. Without exception, these men and women believe the pandemic is a catalyst that will accelerate existing trends, making it all the more pressing for leaders to boost their companies' performance.
The CEOs we spoke with identified five business trends shaping corporate Asia.
First, Asia will determine the future of Asia, with the region continuing to grow in global stature. "If you look at both wealth formation and consumption," said Piyush Gupta, CEO of Singapore's DBS Bank, "Asia continues to outpace most other parts of the world."
Second, data and digital innovation are transforming the consumer experience.
Thirdly, scale—with a local touch—will consolidate power as the pandemic creates opportunities for stronger companies to consolidate and grow. "M&A activity is almost a necessity now in Asia," said Scott Hahn, CEO of South Korean private-equity firm Hahn & Company. "Think of the emphasis on size; if you want to balance supply chains and do that quickly, you're going to need to buy rather than build."
A fourth trend is for operating models to be optimized for speed, agility, and trust, with flatter organizational structures spurring swifter decision making.
Finally, CEOs believe purpose, which proved essential for responding to the pandemic, will be equally central to creating resilience for the future.
These five trends – accelerated by the pandemic – will challenge leaders as never before. To capture Asia's opportunity, companies need to move quickly and boldly, adapt constantly, and collaborate deftly. Related to these trends, we believe that five actions will be essential to success.
First, companies will need to adopt both a telescopic and a microscopic perspective. We can safely predict that the above trends will play out over the long term, but we should also assume that there will be ample unpredictability along the way, particularly over the short term. CEOs and their boards must keep a close watch on not only what's ahead but also what's happening right now, in real time.
An active board can be essential for enduring value creation. Sumant Sinha, CEO of ReNew Power, a renewable-energy company in India, draws a parallel with India's promoter-led companies. "Promoters tend to have a much longer-term mindset; they tend to think much more about the future than a management team might if it was driven by short-term results and incentives."
Regularly deploying data analytics can deepen leaders' understanding of changes in customer and employee engagement. Nearly half of the top-performing companies we interviewed collect and analyze customer data weekly. And having a plan-ahead team can improve agility and help CEOs respond swiftly to abrupt trend breaks.
The second action is to implement bigger, bolder strategic moves. Although big changes may feel intimidating, especially in times of unpredictability, successful CEOs are focused on reimagining what their companies can achieve. Now is the right time to execute seismic shifts in strategy.
Executing such a to-do list in the current environment may be daunting, but Michael Gryseels, a top executive at True Corporation, is optimistic. "We've seen an acceleration of many initiatives that we were already taking to bring our businesses digital," he said in a September 2020 discussion with McKinsey. "So, there's been an opportunity in this crisis to get on faster with what we were planning to do or to respond very fast in situations we have never anticipated."
Companies boost their odds of success when they act boldly: reimagining their organizations along zero-based principles, amping up productivity to reach the top quartile of their industries or close to it, and implementing a programmatic approach to M&A, including divestitures.
Thirdly, business leaders must become trisector athletes. "The [pandemic] has accelerated engagement between the public and private sectors at the intersection of digital technology and healthcare experiences, and the future of care will demand rethinking core assumptions about the intersection," said Shobana Kamineni, executive vice chairperson of Apollo Hospitals in India.
Operating as trisector athletes, leaders must be able to manage and create sustainable value for organizations, society, and government stakeholders over the long term. They need to manage beyond their firm's four walls and recognize that by serving employees, customers, suppliers, and communities, they serve investors to maximum effect.
Fourth, CEOs need to become the chief meaning maker. A compelling purpose is a differentiator, not only focusing an organization but also acting as an engine for resilience and speed.
"A clear purpose statement is a unifying statement and a benchmark to test decisions," said Karen Wood, chair of the board of Australian energy company South32. Some steps CEOs can take include embracing diversity and inclusion, which have been found to correlate to a company's performance, connecting your purpose to your company's "superpower," and getting the most from ESG to meet and exceed social expectations. Putting your company's values into action now will have a lasting impact over the long haul.
Finally, business leaders must learn to walk the tightrope. The post-COVID-19 environment in Asia is simultaneously exciting and volatile. Leading a business in this climate is a balancing act. Given everything a corporate leader has to manage, it is easy to stumble. The modern Asian CEO needs nimble balance and the ability to discern and define a clear vision.
That optimism is shared by the other CEOs. They are confident that the best years for their businesses lie ahead and are doubling down on Asia's future. Leading corporations are setting their aspirations even higher now, and following through by making bolder commitments, moving faster, and scaling up.
About the Authors
Noppamas Sivakriskul is a senior partner at McKinsey & Company and managing partner of the firm's Bangkok office, where Jatin Pant is a senior partner.
For further information please contact Alan Laichareonsup at email: Alan_Laichareonsup@mckinsey.com
Series Editor: Christopher F. Bruton, Executive Director, Dataconsult Ltd, chris@dataconsult.co.th Dataconsult's Thailand Regional Forum at Sasin provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.
