We had an influx of calls from Australian media asking what we were going to do with our staff in Japan as the Australian Foreign Minister had encouraged repatriation to Australia.
Clearly those journalists looking for an Australian angle assumed our Tokyo office was filled with ex-pat Australian bankers. In fact, all but one of our staff in Japan were locals, and our one ex-pat decided to stay to support his staff.
Having worked in many countries in my career, I was struck by that assumption. It was a reminder for me of one of the core reasons why companies from mature Western markets expanding offshore often fail where there is a tendency to “colonise” with the culture and people from your home market.
The feeling from head office presumably is this is how you instil a uniform culture. The truth is this is probably the quickest way to ensure failure.
Building a business outside of your main domestic markets, like ANZ has been doing in recent years, is difficult and takes enormous effort. Getting the right workforce is not just one of the keys to success it is essential.
When ANZ embarked on its super regional strategy at the beginning of 2008 we had around 5,000 people working in Asia and the Pacific, today that number totals almost 20,000 in 27 markets.
So how do you build a workforce that can help you take advantage of Asia’s rise?
I’ve written before about the importance of hiring Asian insiders to support business success in Asia. As we do in all our Asian countries, including Japan, it’s imperative you hire people that have an intimate feel for how a market works.
But this is more than just hiring locals and experienced ex-pats. Just as importantly, it includes ensuring your senior leaders, the people making the decisions and setting the strategy, have the experience necessary to make the right calls.
It sounds simple but is much harder in practice given the lack of sophisticated Asian experience in Western markets like Australia.
I recently chaired a taskforce for AsiaLink that looked at how we can build an Asian capable workforce in Australia. The current statistics, while startling and disappointing given Australia’s geographic position and history of Asian immigration, at least provide the burning platform required.
We found that the higher the proportion of senior leaders who have cultural training, speak an Asian language or have lived and worked in Asia for more than three months, the more likely the performance of that business will exceed expectations.
At ANZ for instance, while more than 70 per cent of our top 120 executives have significant international experience, this is why we are also just as focused on our future leaders with almost half the graduates recruited in 2013 speaking an Asian language.
Critically, the AsiaLink taskforce found the Asian experience of senior managers and board members of Australian companies was low. Just over 40 per cent of the 380 companies surveyed said they had executives with Asian experience. The figures at board level were even lower.
Given that lack of engagement with Asia at senior levels within Australian business it’s no wonder investors are skeptical about a company with international ambition.
In fact, when we first outlined our super regional strategy our share price suffered. It probably took a few more years than even I expected of focused execution to convince the market we have the right people and right strategy to deliver.
One company, one culture
Veteran Australian investor and industrialist David Hains told Andrew Cornell, now our BlueNotes managing editor, the biggest challenge facing companies wanting to expand was cultural – especially when that expansion was across borders.
David explained that when a company is growing at say 20 per cent a year, at the end of that year one-in-five people will be new to the organisation. The following year two in five will be relatively new and they will be learning about the culture of the company off each other.
This is why it’s critical for any business embarking on an international expansion, no matter what size, to have a strong unifying company culture that transcends borders.
It will cause dysfunction if offices in different cities have their own unique culture. This doesn’t mean that the local country culture is not embraced, and certainly not that you should stock each centre with people from head office, but it’s more a recognition that in our case we are one bank, with one group of shareholders.
The right training
Customised training programs are just one example of how we ensure a robust company culture across different borders while also making sure our leaders have the necessary experience to execute our strategy.
Whether it’s the generalist banker program that is developing our future country CEOs or the management courses we give our most senior executives, all are aligned to our company’s vision.
However, developing your people can’t be limited to formal training from the HR department.
One of our more successful programs to improve collaboration and understanding across different cultures involves sending 100 of our best performing commercial bankers each year from Australia and New Zealand to meet their counterparts in Asia.
While it was an eye opening and rewarding experience for the bankers, it actually helps us grow our business by providing our customers with a better service.
When those bankers get back to their desks they are much better placed to advise their customers looking to expand into Asia. As a result, our bankers have the relationships on the ground to help them make connections, whether it’s a primary producer from Dunedin selling into new markets in China or an architect from Sydney looking to set up shop in Cambodia.
Building an Asia capable workforce is not easy - it takes many years of hard work to shift the dial and there will be setbacks. An Asian capable workforce however is essential if your organisation is to share the opportunities Asia’s rise presents.
Success will still be a challenge, without such a workforce though it will be impossible.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.