Saturday, October 19, 2019

Keeping cool in a CRISIS

May 24. 2019
John Heo, vice president, Southeast Asian operations, Emerson Commercial and Residential Solutions
John Heo, vice president, Southeast Asian operations, Emerson Commercial and Residential Solutions
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By PHUWIT LIMVIPHUWAT
THE NATION WEEKEND

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INSIGHTS forged in a crisis have proved enduring for John Heo, who took up an executive position in Thailand when the country was gripped by the Asian financial crisis.

He arrived in 1998 to sell airconditioners but, on the economic front, the heat was on. When the market in the cold chain industry collapsed a key decision was made. The employees were kept on as sales plunged.

For Heo, that move demonstrated the importance of fostering a strong relationship with the workers. Together with localisation, these principles are the key factors to managing a successful international business, he says.

“Business is essentially a form of relationship between different people with different interests,” says Heo, in laying out his philosophy for managing the business at Emerson Commercial and Residential Solutions, where he is vice president of the company’s Southeast Asian operations.

“Of course, we have products to sell. However, if we do not have a loyal workforce, a capable sales team and good customer relations with the top management, success will be difficult to achieve,” he told The Nation Weekend. 

Heo, originally from South Korea, is a 27-year veteran with Emerson, which is engaged in the cold chain industry, selling products from air conditioners to refrigeration units. The firm targets various businesses within the cold chain, a supply chain of goods that need to be stored under controlled temperatures, such as fruit, meat and vegetables. 

When he moved to Thailand in 1998, it was as the regional sales director for Southeast Asia for air conditioning – putting himself on the business front lines of one of the biggest economic disasters that the Kingdom has witnessed. 

“Right before the economic crisis, Thailand had the biggest potential for the air conditioning business,” Heo says.

Around that time, Emerson had invested over US$100 million to establish a manufacturing centre on the Eastern Seaboard, the country’s manufacturing hub that has since been redubbed the Eastern Economic Corridor by the current government.

“With a manufacturing base located in Thailand, there was a strong sense that Emerson could grow at a fast pace in this country,” Heo recalls of the period.

However, the unfolding economic crisis sapped demand from the market, damaging Emerson’s prospects in the country.

“At that time, we had already hired roughly 400 workers in one year, but as the crisis occurred, demand for our products plummeted,” he says.

It was at this point that Heo began to put his business philosophy into practice. 

“Despite the drastic fall in demand, we kept our employees and avoided making our workers redundant,” he says.

“We kept all our employees despite not having work for them to do. Instead, we used that time to continuously train our employees and give them the financial support that they needed so that they would be ready to work productively when there was a resurgence in demand. This went on for up to six months.”

When the economy started to recover in the early 2000s and new factories started to be established on the Eastern Seaboard, it was common for workers to move around as they tended to be drawn to firms that offered higher worker commissions, he says.

“However, because of what we did for our employees for six months, they became very loyal. They knew that we cared and that we did our best to keep them employed and supported them during an economic crisis,” Heo says. “Hence, our turnover rate was extremely low.”

After the crisis, Emerson’s business in Thailand grew as planned, and Heo was eventually promoted to vice president for the rest of Asia (excluding China) in 2009, and to vice president for Southeast Asia in 2016. 

“To become a successful executive in an international business, you must have the flexibility to accept the different cultures,” says Heo, adding that this included both the work culture in the different countries and the local demand of the customers. 

“Globalisation and localisation must go hand in hand,” Heo says. “Foreign firms may strive for international success with the vision of globalising their products and services. However, once you settle locally, the most important priority for a firm should be localisation.”

He suggests that firms should make it their top priority to gain a holistic understanding of the local culture, both at a level of the employees and the work culture, and the demands of local customers. 

Heo embraces the term “glocalisation”, which combines the words globalisation and localisation. 

“My aim is to work successfully in an international business with global success, but do so by localising in the particular country or region that I am responsible for,” Heo says. “To this extent, I believe I have done a good job.”

 

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