Monday, April 06, 2020

Mindset the swing factor in turnaround

May 15. 2019
Larry Chao, managing director of Chao Group Limited
Larry Chao, managing director of Chao Group Limited
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OVER the past six months, Nestle Indochina has experienced a remarkable surge in business performance.

After years of tepid growth, where the business struggled to compete against aggressive competitors and to understand fickle consumers, Nestle finally managed to break through and beat its targets at the end of 2018. At the end of the first quarter of this year, business growth exceeded the budget target by more than 20 per cent.

Victor Seah, who in May 2018 took over as chief executive of Nestle Indochina’s Bt44 billion operation in Thailand, Myanmar, Cambodia and Laos, believes that it was not more experience, expertise or resources that contributed to these results, but a change in the mindset of his leaders.

“We didn’t add people or make any unusual investments during this time, but the willingness of our leaders to work together and do what was best for our business in Indochina made the difference. As a result, we executed faster and more effectively,” he said.

Indeed, last September, Seah gathered his top 50 leaders at an offsite meeting in Hua Hin to debate and sort out key growth strategies for the upcoming 18 months. It was a critical time to gain traction on what Nestle needed to do to succeed in Indochina.

Most of the emphasis was placed on three business areas: core coffee business, opportunities in so-called liquid drinks, and how to strengthen distribution and sales.

“The offsite was the catalyst. It was as if a light bulb went off and people started collaborating and working together toward common goals, rather than operating in silos or on separate agendas,” said Seah. “The team elevated growth as our highest priority and simplified what needed to be done.”

What drove the success at this offsite meeting? In hindsight, much was due to Seah’s ability to motivate his leadership team to collaborate and synchronise its efforts. To do this, Seah had encouraged healthy dialogue during the offsite, where people were willing to say what was on their minds and share information openly. Even controversial issues were discussed in a constructive, respectful manner. As a result, the offsite was relaxed, yet productive. People left knowing exactly what they needed to do.

To lay the groundwork for healthy dialogue, prior to the offsite meeting, cross-functional teams were asked to develop integrated plans needed to succeed in their business areas. Participants were urged to think of driving growth as their first priority, and work together as a unified local market team, rather than with disparate functions.

Meanwhile, Seah empowered his team to execute with minimum interference from himself and others.

“As market head, it is my responsibility to ensure our leaders have the resources and freedom to execute the right strategies. If we compromise what we need to do, the competition will punish us,” he said.

Seah is not alone in facing this challenge. 

For many multinationals, it is often the country manager’s role to create the right conditions for teams to implement the most competitive local strategies. Often this means making the right trade-offs between corporate policies and local market needs.

As Seah plans how to sustain Nestle’s growth engine through Indochina’s current political uncertainties and choppy economic times, he knows the importance of maintaining healthy dialogue, synchronisation and supporting his team’s commitments.

In fact, the company has just completed a series of employee engagement meetings where Seah and his leadership team met with over 3,500 employees across the Indochina region to communicate the vision and direction of Nestle Indochina for the future.

“There is no shortage of capabilities, talent and experience in Nestle,” said Seah. “And there is no business problem so big that we cannot solve it. My job is to ensure that everyone is aligned behind a common vision, is engaged to work together, and keeps their eyes on the prize.”

LARRY CHAO is managing director of Chao Group Limited, an organisation change consultancy based in New York and Bangkok since 1995 [].


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