Picture this. We are sitting in Skyscanner’s offices. It’s our first SkyChat Evening – intimate events where we feature longform conversations with smart people who are in town.
On the couch with me is Fritz Demopoulos, co-founder of Qunar and now CEO, Queen’s Road Capital.
Just that week, I had published an interview I had done with Gareth Williams, CEO of Skyscanner, and his belief that “to win, we have to win in Asia” and he had outlined three ways in which Skyscanner intended to win in Asia.
So of course I couldn’t resist the temptation to ask Demopolous, who pioneered travel search in China, what he would do if he were running Skyscanner.
Saying Skyscanner was a company he admired a lot for its methodical “step by step” execution, clear product focus and strong leadership, he said, “I wonder though if Gareth should consider basing himself in China or Singapore for a year or so.”
I did ask Williams the same question during our interview and he said that while he would have loved to be based in Singapore, he had family to consider. He was however spending more time in the region, he said.
I am glad Demopoulos raised this point because it’s one I’ve been asking chief executives of global brands for a few years. Yes, Starwood got some media coverage couple of years ago when it announced its executive leadership team would spend a month in China. But a month is hardly enough to get to know any market, especially China.
In September 2014, Carnival Corp. CEO Arnold Donald announced that COO Alan Buckelew would relocate to China, a move he said reflected the high importance of China.
Its bet on China seems to be paying off – cruising is taking off bigtime. Carnival says it expects the overall number of outbound cruise passengers from China to hit the 1 million market for the first time in 2015, and serve almost half of those.
“China presents the next great frontier for cruising,” Donald told Wall Street analysts in May when it raised 2015 profit forecasts on the back of stronger than expected demand. “It’s just a matter of time before China becomes the largest cruise market in the world.”
I see this as an inevitable trend – the relocation of key senior executives of foreign brands to Asia. It’s a choice between stagnation in matured markets and growth in emerging ones.
In May, George Seissman, the CEO of IO, the sixth largest data centre provider in the world, relocated to Singapore. This is what he said in this interview. “We are deeply committed to the ASEAN region and Singapore. We believe it will be the largest growth market for IO in the next five years. In fact, my wife and I recently moved to Singapore because I see incredible opportunity to grow and expand the IO footprint throughout Asia. We plan to have the majority of our business operations and R&D located in Singapore over the next five years.”
Photo credit: iStock
In a region that’s growing fast and, more importantly, changing faster, I don’t believe you can continue to run it by remote control and have “Asia vice presidents” report back to HQ for decisions. By the time a decision is taken, the opportunity is lost, the momentum gone. The local team has lost interest as well.
I am not of course advocating the wholesale migration of global CEOs to Asia – the company has to decide if it’s the right strategy for them and it’s got to be the right person. It might actually be suicidal if someone who didn’t know the region came in and messed things up.
I suppose in this highly-connected world, it shouldn’t matter where you physically sit – but you know what, it matters. Parachuting into a place to have some meetings and work on a project is not the same as living and being immersed in it.
So unless the corporation is run in such a way where local and regional teams have complete autonomy over their business and can truly call the shots, I don’t believe it’s a good recipe for winning in Asia.
