Behind The News, Sarah Monks: SCMP

A Hong Kong training scheme is taking young executives out of their comfort zones to learn about the real world

For most people Cambodia is the splendour of ancient Angkor contrasted with the horror of the killing fields. But for Chandran Nair it's where tomorrow's business leaders can hone essential "soft skills" to compete in the global economy.

Mr Nair, the Hong Kong-based founder and chief executive of the non-profit Global Institute for Tomorrow (Gift), heads an executive learning programme that includes field trips to Cambodia and other developing countries, taking high-fliers out of their comfort zone for a wider view of the world. He says his programme fills a gap in business school education which, if unaddressed, can mean missed opportunities, poor quality decisions and increased risk.

"You can come out of business school with an all-round understanding of the functional skills but that is not going to make you a success in terms of managing in a more complex world," said Mr Nair, who is also an adviser to the Prince of Wales International Business Leaders Forum.

"You can go through your career having less and less interest in the wider issues shaping our world and possibly making decisions that come back to haunt you. Leaders in the 21st century need to learn very different skills and acquire them in unusual ways."

Since its launch in 2006, Gift's Young Leaders Programme has put more than 100 executives from Hong Kong and 16 countries through their paces in unfamiliar settings with new challenges, such as how to make an agricultural supply chain profitable. Each programme lasts about two weeks, starting with intensive MBA-style classroom sessions in Hong Kong.

Mr Nair said that in the field, participants dress in T-shirts and trainers and operate from huts and village halls alongside local community enterprises whose credentials have been vetted. A course requirement is to develop a "real world" business plan that a social enterprise can take to potential investors. Gift also helps to find investors attracted to making money from sustainable development and to facilitate partnerships.

Mr Nair said the Young Leaders Programme was the first in Asia to link executive learning with investment and development opportunities. Companies that have sent executives include Cathay Pacific, MTR Corp, Cheung Kong Group, Shui On Group, CLSA, Malaysia's Petronas Group and Asian offices of global firms such as UBS, JP Morgan and Hewlett-Packard.

Mr Nair, a visiting scholar at the business school of the Hong Kong University of Science and Technology, said the key to understanding the complexity of global business is knowledge of the trends affecting people and markets, and how decisions taken in one place impact on another.

"Take Cambodia, where many Hong Kong manufacturers are pumping money into the garment industry," he said. "If an executive in Hong Kong wants to do this at low cost without, for example, putting in place a reliable waste water treatment plant, this will have a huge impact on the livelihood and health of Cambodian farmers as it will pollute irrigation waterways.

"You need managers working in these countries who are going to understand the major issues they can influence, from discrimination to water pollution," he said. This was also key to managing risk in a world where any corporate failure over safety, ethical or environmental issues was widely publicised.

Executives who made decisions with negative impacts often did so without realising, said Mr Nair. "It's so comfortable to use ready access to the electronic media as a proxy for not confronting harsh realities. It allows us to escape dealing with the conflicts inherent in the decisions we make. To make smart decisions you must have a broader knowledge base and awareness."

He said success and competitive edge now depended on the ability to identify and manage less than obvious opportunities. "Who has that knowledge? It's people with a much wider view that is not the standard view of the world."

Mr Nair said many Hong Kong executives did not thrive in cross-cultural settings, as they lacked the right soft skills. "Put them in India, the Middle East or Laos without these skills and they have real difficulties," he said. "They're not comfortable dealing with people who have different outlooks even when it comes to how to do business."

He added that this was of particular concern to Hong Kong companies seeking alternatives to the Pearl River Delta for their offshore manufacturing. Capital and technology alone were no longer enough to capture the best investment prospects as competition was increasing.

"It's the people who empathise with others, who understand, who are able to communicate respectfully and make friends that are going to be critical success factors." Mr Nair said it was "quite difficult" to get this point onto the agenda of mainstream executive learning. "So much money and time is spent on the conventional executive MBA approach. I'm not saying that's not important, but the relative importance of getting these softer skills is misunderstood."

Cathay Pacific's manager for organisational development and learning, Graham Barkus, said soft skills were among the hardest to acquire and apply well. The airline has sent four executives on the Young Leaders Programme. Mr Barkus said it exposed participants to ideas, concepts, issues and challenges they might never have considered before but which were likely to have a significant impact on what business looked like in the future.

"Issues such as working effectively across multiple cultures, creating productive team performance quickly with a group of people who haven't worked together before or might not even know each other, and connecting business activity with real and valued community and social outcomes often get treated only at a conceptual level," he said. "But they will become increasingly a feature of how business works, and what skills a manager will have to have to be effective."

The MTR Corp has sent eight managers on the programme. Its human resources director, William Chan Fu-keung, said MTR's strategy was to fast-track development of talent through cross-functional and multicultural experience.

"The Young Leaders Programme is in strong alignment with this strategy, as it provides learning experience outside Hong Kong and beyond the classroom. The programme is also a good opportunity for our young leaders to learn with participants from other progressive organisations."

An initial challenge, said Mr Nair, had been to correct misperceptions that the initiative was about development aid or charity. "This is an executive learning programme, not volunteering or corporate social responsibility," he said. "It's not about feeling sorry for poor Cambodians, which doesn't help them.

"I tell participants that we're not going to save the world. We're not going there to find the poorest of the poor, we're going there to work with people who have a business idea and we're going to bring hard business skills to find solutions that a hard-nosed investor will happily back with money."

Mr Nair said one business plan had recently moved ahead on the mainland with an investment of just US$20,000 to build a water supply system. "We want to prove that small sums of money can make a huge difference. That is an especially important [lesson] for people coming from large companies."

Mr Nair said many "second-generation" Hong Kong entrepreneurs were interested in making investments that also benefited developing communities in a sustainable way. There were many unrealised opportunities on the mainland that could benefit the poor, such as cultivating organic food for city-dwellers.

"It's a form of business opportunity that many in Hong Kong are not used to because their experience lies in opening a factory with 3,000 people to churn out ball bearings, bags or toys," said Mr Nair. "But this is different. It requires a different outlook on the future and strong empathy. That's why softer skills are so essential."

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