Young corporate leaders in Asia are embracing new ways of leadership as they cope with the complex challenges of running a company in volatile times and the need to focus on environmental, social and governance standards and practices, especially as they vie to attract talent to their organizations. Lauren Chung of Teneo writes about what she and her colleagues learned from one-on-one interviews with 20 emerging CEOs from across the region.
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Asia’s next generation of CEOs are leading their companies through arguably the most complex financial, geopolitical and social challenges to have emerged in the past few decades. This includes ongoing interest rate hikes, war in Europe and trade and territorial tensions in Asia as well as new technologies that are changing the way people live and work, among many other factors.
Young and emerging CEOs in Asia are adopting new models of leadership to meet the challenges they face, uncover new opportunities to drive growth and enable positive change for their employees and the communities they operate in.
In a series of one-on-one interviews with 20 such leaders located in mainland China, Hong Kong, Japan and Singapore, Teneo, a global advisory firm with headquarters in New York and seven offices across the Asia Pacific, explored how they are approaching the agenda-determining corporate issues of our time: leadership, corporate purpose, values and culture, risk and resilience, stakeholder engagement, ESG (environmental, social and governance) strategy, the future of work, technology and Web3, and the outlook for Asia.
Next-generation CEOs identified a few key themes at the top of their agendas, including the much-discussed “war for talent” and the almost constant need to evaluate and prepare for “known unknowns” and “unknown unknowns”. But what was perhaps most striking was how they are rethinking their approaches to leadership in the midst of personal and professional challenges.
Leaders faced deep personal challenges over the past three years of the pandemic, which continues to effect day-to-day work and life in much of Asia. These challenges led some to rethink the human element of running a business, shifting the balance of their focus to enhance their level of engagement with management peers, external stakeholders and – most important – employees.
Increased engagement with employees was strongly influenced by corporate purpose, values and culture, as employees today are looking for a more motivational, mission-driven style of leadership that prioritizes purpose as much as profits. The leader of a hospitality chain with more than 2,300 employees in Greater China explained, that “if they [employees] believe that their company and their CEO really want to make a difference in the world, they become excited to be a part of the change.”
CEOs were very aware that driving this level of engagement depends on having a clearly defined corporate purpose, values and culture. The CEO of a Chinese real estate and logistics space investment company with over 5.1 million square meters of gross lettable area summed this up by characterizing purpose, values and culture as a “‘North Star’ [to] give direction for executives to think about how to navigate volatility.”
The leader of a Japanese sustainable data company, recognizing how easy it is to lose sight of corporate purpose, explained that he reminds himself every day of the mission of the company and communities it to employees, customers and prospects. Another CEO shared how he uses storytelling to communicate purpose, values and culture to these stakeholder groups, an approach that requires the company to have a clearly established corporate narrative to ensure consistency of messaging.
That said, one of the most interesting findings from the interviews was how concepts such as purpose, values and culture differ across generations and stage of corporate development. Leaders indicated that while younger employees emphasize the need for a sense of meaning and belonging in a workplace, older generations are more interested in the company’s future prospects.
Similarly, younger companies tend to be strongly influenced by their founders and spend a lot of time refining their purpose, values and culture to align with their personal beliefs and corporate strategy. More mature companies, on the other hand, generally espouse purpose, culture and values related to their operations, services or products.
In the current environment, leaders were highly focused on risk and resilience. CEOs revealed that in their discussions with stakeholders, geopolitical tension is near the top of the list of concerns. While several have already seen their operations being affected by the war in Europe and increased trade tension, the CEO of a knowledge management start-up employing about 500 people pointed out that “the key to resilience is adaptability and being able to derive positive energy from change.”
The need for adaptability arose frequently, with more than one CEO indicating that it is becoming difficult to develop and implement long-term corporate strategy. Some have shortened their planning cycles to periods as short as six months to ensure that their businesses remain relevant in a rapidly changing environment.
The topic of ESG went hand-in-hand with risk management, with most CEOs recognizing ESG factors both as potential sources of risk and opportunity. Many highlighted the social pillar as their primary focus, noting that emphasizing social value in an authentic manner – including caring for employee welfare and contributing to the communities they operate in – has the potential to elicit goodwill from governments, regulators, local communities and clients.
That said, investors were almost universally acknowledged as the strongest push factor for sustainability. For example, institutional investors insist on strong ESG credentials and start-up companies looking to go public face intense scrutiny because of exchange reporting requirements.
Technology came up in every conversation with leaders, as many are wrestling with how – or whether – to embrace Web3 technologies such as blockchain and the metaverse. Financial firms were most interested in blockchain technology, while those in the property and hospitality sectors saw potential in the metaverse.
That said, most ultimately are adopting a wait-and-see approach. On the one hand, one of the leaders of a Japanese e-commerce aggregator indicated there is a need to be ready to adopt these technologies “when changes in consumption patterns happen.” On the other hand, CEOs of companies in highly regulated industries pointed out that they have to maintain a conservative stance until governments clarify related regulations.
Despite this, there was awareness that technology has already significantly affected corporate operating models and approaches to leadership. Technologies that today seem pedestrian such as videoconferencing were seen to have relatively recently upended operating models during the pandemic and the rise of hybrid work.
Against this backdrop, it was acknowledged that younger workers now have very different expectations of work. Those who have entered the workforce in the past three years are making decisions about taking or staying in a job based on the balance of in-office and work-from-home time. CEOs shared very different views on this, with some having adopted completely flexible working arrangements and others allowing one day a week or one day a month of work from home.
As the CEO of the Chinese data center service provider explained, companies need to “strike a balance between flexibility, face-time and efficiency.”
All of the areas addressed so far deeply affect how CEOs interact with stakeholders such as regulators, investors, employees and boards of directors. Regulators, investors and employees have always been important stakeholders, though leaders highlighted that engagement with them has fundamentally changed as companies are now expected to maintain a higher degree of transparency, are responsible for a wider range of issues – including the growing prominence of ESG factors – and have taken on higher degrees of responsibility for employee welfare since the pandemic.
What has changed is the level of engagement with boards of directors. The days when a board would meet once each financial quarter are long past, with some CEOs updating their boards as frequently as once a week. The CEO of a telecom and technology solutions company described a process by which “the board and management think through problems together [and] build consensus and alignment. If things do not work out, it’s a collective decision.”
Overall, leaders are bullish about the prospects for Asia. China is expected to remain a key market, even as its growth slows. Southeast Asia is seen as a growth opportunity, and select industries are investing in developed Asian markets. All leaders acknowledged that there is no “one-size-fits-all” approach to doing business in the region and carefully tailor their approaches to each market.
One theme that resonated across all of the topics that the CEOs addressed was change. To keep up with the pace of change, maintain awareness of risk factors and ensure robust planning, leaders highlighted the importance of trusted partners who help them identify and map risk and undertake scenario planning. Three key sources of information cited were internal partners, board members and external partners such as consultants or academics.
Discussion with these CEOs revealed a generation of leaders who have taken the reins in a period of significant economic, political and social volatility. They are arguably natives of uncertainty and change and are thus forging new approaches and strategies, creating in the process new models of leadership across a wide array of business-critical challenges and opportunities.
Chung, Lauren; van der Leest, Yuri; and Ho, Chloe. (November 2022) “Asia’s Next Generation of CEOs and Corporate Leaders: Perspectives on leading through disruptive change”, Teneo Insights, Teneo, New York, NY, USA.
Lewsey, Josh; Vasey, Anthony; Chung, Lauren; Wang, Oscar; and Low Christine. (October 31, 2021) “Value Creation in Asia – The Evolution of Investing: How Are You Adding Value”, Teneo, New York, NY, USA.
Nurgozhayeva, Roza. (November 26, 2020) “Asian Corporate Law in a Post-Covid-19 World”, AsiaGlobal Online, Asia Global Institute, The University of Hong Kong.