SCG grooms future 'global leaders'

Anticipating fiercer competition on all fronts, particularly from the upcoming Asean Economic Community (AEC) in 2015, SCG chief executive and president Kan Trakulhoon announced in 2006 his new corporate vision to change the course of SCG from a commodity producer to one delivering higher value-added (HVA) products and services, and to “go regional” by expanding aggressively into the nine other Asean markets.
“We have been the leader in domestic market for almost 100 years but in the future, because of the AEC, we must move our focus from the domestic market, which has only 55 million consumers, to Asean, which has a 600-million population,” Aree Chavalitcheewingul, SCG vice president for Corporate Administration, explained to the ASTD forum.
“In the future, Thailand can’t compete on costs anymore because our costs are higher than Vietnam and Indonesia. We increased our minimum wage by 40 per cent just last month. Our energy cost is much higher, almost two times Indonesia’s.” 
Hence, in order to sustain business growth, SCG has realised  it has to shift to high-value added [HVA] products and emphasise more on branding, technologies and green products. The chemicals, building materials, paper conglomerate has set itself a “tough” target to increase the contribution of HVA products and services from four per cent of total group sales in 2006 to 50 per cent by 2015.
“Frankly speaking, at that time I was still a general manager in the building materials business, I was shocked. This was a big challenge for us,” said Aree.
“Nevertheless, now HVA has risen to 32 per cent of total sales. I am confident we can achieve the target.”
The SCG executive was invited to speak at the ASTD 2012 conference on the topic “Building the New Global Leader”, in conjunction with executives from leading Thai consulting firm APM Group. The seminar was attended by close to 9,000 participants from around the world.
Aree pointed out three major challenges of SCG in implementing the corporate and people transformation scheme:
First, it has been  transforming during a good time, without the existence of the “burning platform”; second, it has to sustain remarkable business results in a highly competitive environment; and third, it has to transform through applying “positive change” initiatives. The conglomerate took more than two years to gain “buy-in” and acceptance from its staff and formally started to implement the organisational and leadership transformation only last year.
James Engel, senior executive director and organisation learning practice leader of APM Group, which assisted SCG on the project, told the ASTD conference that another big challenge for SCG in reaching its strategic goal to expand abroad was the fact that most Thai executives usually don’t like to work overseas.
To implement new corporate strategies, SCG has set up learning and development teams across business units and functional units and worked with its 72 middle to executive levels to come up with the “leadership profile” for its executives comprising engagement, imagination, and excellence:
-Engagement requires its executives to embrace diversity, meet stakeholder demands, let “emotions matter”, and realise the “value of people”.
-Imagination means an ability to leverage opportunity, differentiation, deliver value, and become “crisis proof”.
-Excellence incorporates “change ready”, increased dynamism, business complexity, home for talent, and Asiawide.
APM Group’s managing director, Arinya Talerngsri, said following the launch of the new leadership profile earlier this year that SCG would focus during the next 12-15 months on its organisational and people transformation efforts to serve the immediate needs of its business units. For instance, the paper business unit, which is focusing on moving from functional-focus to matrix-organisational focus, will have to develop its leaders to attain a “matrix mindset”.
The building material business, which is moving from selling products to solutions offering, meanwhile, needs to develop people with the right attributes, skills, and knowledge to align with the new business strategies. 
In parallel with addressing the immediate needs of business units, Pimjai Wangkiat, corporate organisation development director of SCG, said the group will work on a longer-term goal to groom its future leaders, while continuing to embed its “SCG People Way” into the organisational culture.
The SCG People Way is derived from its commitment to the four core values – adherence to fairness, dedication to excellence, belief in the value of the individual, concern for social responsibility – and the new “open and challenge” corporate culture, which are considered the key enablers for its successful organisational and people transformation.

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