150 Years in the Making
As a company with headquarters in Switzerland that has been operating in Asia for almost 150 years, DKSH has the prototypical outside-in perspective on Asia. HQ Asia spoke with Dr Jörg Wolle, President and CEO of DKSH, to garner his perspective on cultural nuances, talent development and business practices in Asia.
DKSH has been operating in Asia for almost 150 years. To what extent do you think DKSH is now an Asian company?
DKSH has three founders – Wilhelm Heinrich Diethelm, Eduard Anton Keller and Hermann Siber-Hegner – who left Switzerland to sail to Singapore, the Philippines and Japan, respectively. All three became deeply ingrained with the local cultures in which they settled. For example Siber-Hegner was the secretary of a diplomatic mission that negotiated the treaty of commerce between Switzerland and Japan. He was a not only a smart businessman, but also deeply interested in people and other cultures. Because of this, he kept a detailed diary spanning 16 years – from 1862 to 1878 – about his travels and experiences in Asia. Later, the Japanese were to become extremely grateful for this, because during the massive earthquake of 1923, almost all the historical records kept in Yokohama were destroyed. Siber-Hegner’s diary provides valuable supporting information about Japanese history and is treasured locally. I recently brought that diary to Japan and it is now the centrepiece of an exhibition celebrating the 150-year anniversary of the Swiss-Japanese treaty of commerce. Our company too has spent almost a century and a half being deeply interested in what makes people tick across Asia. This attitude is crucial for us, as we bridge supply and demand between different cultures. We can say that we are equally a Swiss company that is deeply rooted in Asia, and an Asian company that is headquartered in Switzerland – indeed, roughly 96% of our business is generated in Asia.
How has being ingrained in Asia influenced the culture of DKSH’s global operations?
We value trust very highly and work hard to further build on this attribute. In Asia, many deals are still sealed with a handshake. Yes, you sign a contract at the end of the day, but the verbal agreement before the contract is very important. The implication here is that deals are made between people who trust each other and who spend enough time cultivating their relationships. In Asia, people also enjoy haggling, bargaining and negotiating. But at the end of the day it is very clear that everybody must get a good deal and all parties need to go home happy with what they have achieved. I feel that our company embodies this spirit of equitable negotiations. Finally, the concept of not losing ‘face’ is very important in Asia. This concept is virtually unknown in other cultures. When disagreements arise or when critical feedback is given, it is always done in a respectful manner so that ‘face’ is not lost. These unique Asian characteristics make our company stand out from European companies.
You have been involved with DKSH for a very long time. When you think about the big picture, how have you evolved over this time?
One of the biggest changes in our company is that we increasingly hire local talents. Over the past decade, we have started to decrease the proportion of Western expatriates in leadership positions. Notwithstanding, it is important for us to maintain a pragmatic balance between local and Western talents. In our function as a bridge between the West and the East we still need a reasonable amount of Western talents who understand how, for example, our medium sized German, Swiss and American suppliers think. At the same time, it is important to retain a good share of Asian talents who better understand the local business and cultural landscapes and, in particular, customer needs.
What are some of the challenges associated with bridging Eastern and Western cultures?
The cultural awareness of our employees can be crucial. Recently, I was on a business trip in Kuala Lumpur during Ramadan. One group arrived to an evening meeting late, because they had underestimated the traffic. What they did not anticipate was the amount of traffic at sunset due to people rushing out to restaurants after fasting all day long. It’s also important to bridge gaps between countries within Asia itself. If you look at the clients of our company, one in four is Asian. To this end, we have launched an important initiative, which seeks to bring products from Japan to Southeast Asia. This concept is very successful with our suppliers in Japan who are usually not used to travelling to Southeast Asia. For them, market expansion to Vietnam or Cambodia is as foreign and challenging as it is for Western companies. We have overcome this hurdle by, for example, employing Japanese staff not only in Japan but also in the destination countries. So when our Japanese client delegations come to Thailand, we are able to make them feel at ease. This may sound very simple, but a lot of companies operating within Asia are unable, or unwilling, to go that extra mile.
Have you considered expanding business beyond Asia to other emerging markets?
One part of my management philosophy is ‘stick to your knitting’. Basically, I prefer to focus on what we do best. Certainly, Latin America and Africa are interesting markets. But we simply don’t have the deep-rooted cultural insights into those regions that we do have about Asia. Moreover, there is still huge opportunity for growth in Asia, so we are in a very fortunate position. We are the number one in our industry across the region, and that industry is still highly fragmented. We will continue to benefit from the growing Asian middle classes, the stronger inter-Asian trade, and the trend that our clients are increasingly outsourcing business to so-called market expansion services providers like us.
What are the difficulties involved in hiring global leadership talents in Asia?
I think one problem we have when bringing Western talents to Asia is that many people underestimate the differences between individual Asian countries. You can teach and train those skills, but first you have to find people who are able to develop a strong awareness and sensitivity of those differences. One thing we are aiming to do is to encourage more mobility within Asia. This means encouraging talents to work outside of their home market. For instance, we now have Singaporeans running our Vietnamese and our Hong Kong operations.
This article was first published in HQ Asia (Print) Issue 08 (2014).