General
Motors, Casio and Hewlett-Packard share their HR experiences on entering the
developing markets in the Asia Pacific region
Kathleen
Barclay
Vice president global HR, General Motors, talks about the HR lessons she
learned through the recent launch of the Zafira by GM Thailand
I
prefer to think of a "challenge" as an "opportunity" just
waiting to happen. If you mix together the uncertainty of a developing market,
with an unproven workforce and a collapsed economy, then you’re ripe for quite
an "opportunity".
That
describes what General Motors Thailand faced in its decision on whether to go
forward with a $650m investment in a manufacturing facility just two hours
south of Bangkok. We chose opportunity!
Today,
GM Thailand is GM’s first wholly owned subsidiary and is considered a linchpin
of GM’s Asia expansion strategy. It manufactures the Zafira, a minivan that was
the first Thai passenger vehicle to be mass-exported to Europe. Production
began in May 2000; volumes have increased by 50% for 2001 and a second shift
started in January.
GM
Thailand did what many said could not be done – we launched a world-class
facility with a completely new product, new organisation and a new brand in
less than 22 months. Our biggest HR challenge was to recruit, train and develop
a local Thai staff in a very compressed time frame, while maintaining
industrial peace and meeting quality standards.
How
did we do it? Simply put, we found and developed people with the right skills
at the right time. First, we set up a rigorous, proven assessment process that
helped us select the best and brightest employees. Then, we secured a handful
of GM employees from all over the world who had technical skills or start-up
greenfield operation experience to come over and literally "transfer
knowledge" to our local national Thai employees.
Third,
we developed aggressive leadership and production training programmes with
employees averaging 37 hours per year. And finally, we institutionalised a
safety culture that has by far the best record in Thailand and GM. GM Thailand
is fast-approaching 10 million hours without a lost work day case.
A
key HR business objective is to create a "second-home" atmosphere at
GM Thailand, part of our industrial peace strategy. To support this, we
surveyed employees and found out what they thought creates a "second
home".
Some
of the results of this have been implementation of the following:
–
a recreation room with an "English corner" to practise language skills
–
a personal-touch fund so teams can participate in "after-work"
team-building activities
–
a fully equipped fitness centre and state-of-the art medical facility
–
"lunch and learn", covering everything from stress management to
child safety
–
a team member assistance programme, which helps employees deal with day-to-day
work and home issues.
I
am proud to say we have had only one formal grievance filed, and I believe this
staff satisfaction is due to our "second-home" philosophy
implementation.
In
a nutshell, to be successful in emerging markets you must be quick to decide,
fast to react and flexible to accomplish the impossible, and GM Thailand is a
good example of taking a ton of challenges and transforming them into
opportunities.
As
I said at the beginning, challenges are just opportunities waiting to happen,
not only for HR professionals, but for businesses such as GM, which are poised
to seize any opportunity that adds value for our business and, ultimately, our
stockholders.
Susan
Bowick
Vice president HR, Hewlett Packard, explains the issues she faced when
the firm entered into a joint venture deal in China
Bill
Hewlett and Dave Packard established the way their people would work together
in a set of core values: respect for the individual; contribution to the
customer and the community; integrity; teamwork; and innovation. These formed
the foundation for how Hewlett-Packard worked, how we treated employees and
customers, and how we approached the art of invention. It became known as the
"H-P Way" – a model for success, which has always distinguished H-P
from its competitors.
When
H-P moved into China in the mid-1980s, the question became, do we try and
introduce these values and management practices locally, or do we need to
redefine them because of the unique environment and culture in China? Our two
joint venture partners, both government-run entities, were not untypical of
China at the time in that their cultures reflected the more structured,
hierarchical and centralised culture of the country as a whole. We also had a
number of deputy managers appointed by the joint venture partners and none of
them was knowledgeable or comfortable with H-P typical management practices. Clearly,
we could not implement the same performance management practices and processes
in China that existed in the US, and the challenge would be to identify
management practices that were consistent with the H-P Way but could be
understood and implemented in China.
We
worked feverishly to develop a system of values and processes which became
known as the China H-P Way, or CH-P Way. Essentially, the values were the same,
but many policies and management practices were different. We felt that Bill
and Dave’s initial vision of how to run a company would apply equally well
anywhere in the world, but we also knew that change would not happen overnight.
For
example, the traditional compensation system in Chinese companies was very
egalitarian and was not based on job level or pay for performance. There was
very little difference in pay between the lowest level and highest level of an
organisation, and the cash component of "total rewards" was
relatively small compared to the benefits value (housing, medical, food allowances,
etc). As you can imagine, the compensation and benefits programmes in China
needed to reflect a balance between H-P’s "pay-for-performance"
philosophy and the local culture and market.
In
addition, performance management was a difficult issue because the Chinese
managers were not comfortable about assessing an employee’s performance and
giving direct feedback to that employee. To get around this, we modified the
performance feedback process and established a training programme for both the
employees and the managers.
Over
the years, the impetus for change came from our Chinese employees just as
strongly as from our increasingly experienced local managers. Our young
co-workers especially wanted to be paid for performance and they wanted their
commitment and success to be reflected in their progression through the firm.
Employees began reading and hearing about the H-P Way and we began to hear
questions such as "Why do we have the CH-P Way rather than the H-P
Way?"
By
the early 1990s, it was obvious to the CH-P management team that we could
"retire" the CH-P Way because local policies and practices were no
longer as "localised" as they had been in 1985 and could easily be
incorporated into the H-P Way. We also leveraged the H-P Way communications material,
which now emphasised core values, company objectives and management
practices/behaviours. With this perspective, it was even more relevant to
abandon the CH-P Way and to emphasise that we all wanted to strive to support
the same values and company objectives. Â
What
did we learn? I think the key lesson is that core values are universal, but to
make those values a reality in emerging markets, you will often have to design
and implement processes that, to Western eyes, may seem very strange. Be sensitive
to local cultural norms, but be willing to modify and change policies and
practices as the organisation grows and evolves. The other critical aspect of
the "starting up phase" is the importance of training and of having
excellent role models in your management team. I think realising human
potential is what HR should be about and that is just as true in Beijing as it
is in Palo Alto.
Chikafusa
Miyamoto
Corporate vice president general affairs and HR at Casio Computers in
Tokyo, talks about his HR challenges in the less-developed neighbouring
countries of Asia Pacific
Casio
has established 18 overseas sites, with more than 5,000 local hires in
developing countries worldwide, to support our global business. The majority of
our local hires are in the Asian countries. We have four manufacturing sites in
mainland China, in addition to those in Korea, Thailand, Singapore and
Malaysia. Their main purpose is to take care of Casio’s production activities
to cover all our markets.
Although
we have been in these countries for a while now, we still have workforce
concerns, such as the need to improve workforce quality and manager empowerment
in high-turnover environments. The resignation ratios of the manufacturing
sites in our neighbouring countries are much higher than that of our HQ in
Japan.
This
is a huge concern for us, because over time, frequent replacement of the
workforce causes low productivity and poor cost competitiveness, and leaves us with
a skills shortage to fill. Although we knew we were unable to prevent people
from leaving us, we also knew we had to make improvements in order to remain
competitive. So we concentrated our activities on establishing stronger teams
as fast as we could in a more empowered and competitive environment.
First,
we got our employees to understand company policy, the company visions and
goals, and how they contributed to that. They were made aware of the
corporation’s objectives and given periodic company business updates so they
felt involved.
Second,
we had to show them that we were a competitive employer, through having a
competitive pay policy. Recognition is now based on merit, level of job and
performance. We demonstrated that there were opportunities for advancement, and
gave employees benefits such as employee assistance programmes, which are not
offered by all the other local companies.
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Third,
we found it was vital to encourage equal opportunities and respect the local
customs. Not just the culture, but local legislation in the areas of training
and development, qualification-based appointment and consideration for
workforce diversity.
Retention,
productivity and output has improved in all our manufacturing sites by applying
all these lessons, hiring qualified people and offering above-market rates to
high performers.
