The Bottom Line.
Change is a long-lasting topic which has been explored alongside technological developments for years. Yet, it remains a challenge which needs to be managed as a process, in a strategic manner. In this Asia-Pacific Insight, we explore the operational aspects of dealing with change with Ms. Isabelle Michelet, Founder of the Human Resources and change management consulting firm Prasena (Bangkok, Thailand). From last-mover advantages to change strategy-building and implementation mindsets, Ms. Michelet interview provides a very practical and interesting perspective on how technological adaptation happens in Asia.
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An Asian perspective on HR and Change Management, with Isabelle Michelet
Hello Isabelle, let us start with the basics. How would you define your expertise?
Isabelle Michelet: I am a resource management specialist based in Bangkok, Thailand, and active throughout Southeast Asia. I help businesses with the operational aspects of change management. For example, a few decades ago, the point was to understand how computers would impact businesses and make them more operational. Nowadays, computing is about connectivity, automation and reinventing processes on an on-going basis, whilst employees themselves are changing, becoming ‘knowledge workers’ – the meaning of which is yet unclear in many organizations. The problem is to find out why change is needed and how to implement it, and this is where I intervene.
What is the best way to deal with change in your opinion?
IM: I see change as a process. Let me take an example. People talk a lot about how ERPs (Enterprise Resource Planning software) can or could help them improve their operational work. On paper, the idea is great, because an ERP enables a company to centralize information, automate processes in a variety of ways, and produce dashboards very useful to the management.
In practice, however, integrating an ERP into a company is not just about adding a tool to the toolbox. It requires analyzing what the collaborators need, figuring out to what extent the system will indeed be useful to them, and defining precisely how the system will improve the business. Said differently, bringing change through modernization and automation is necessary, but the only way to do this smartly is to see the move as a holistic process in which the human factor, the financial factor, the operational factor or the knowledge factor to cite but a few will be included.
What trends do you see in terms of change management in the Asia-Pacific region these days?
IM: I see two great trends in reality. One relates to technology-based socioeconomic changes and the other relates to the way World leadership is shifting from West to East.
Let’s start with technologies first then?
IM: Sure. Technological progress is a trendy topic these days and tech companies have a lot of success, but new technologies have been on the business plate for the past twenty years so this is mainly an on-going work in progress for companies. What’s interesting is to see the evolution in mindsets and what it means in terms of implementing change from a very practical point of view.
In the years 2000’s for instance, people saw software and computers as a means to become more efficient and productive, the easy way. That only happened to a certain extent, however. Of course, technology has allowed us to do things we were not able to do before, but its integration in daily work has been problematic and it still is.
In the years 2020’s, connected technologies are part of our daily lives, but interestingly integration is still a big issue. Service providers compete to provide more and more automation solutions and people have fantasies about automating to make things faster, but the reality is that from the human resources perspective the integration still requires a lot of thinking. Yes, automation is possible, but in many companies, the decision-making system has not changed so in practice you still need seventeen signatures before someone can press the automate button. Similarly, technologies allow anybody to get in direct touch with anybody else, but in practice employees still need to go through the traditional vertical chain-of-command to get the authorization to contact somebody beyond their department or up in the hierarchy. What is the point?
How do Asian businesses deal with this compared to the rest of the world?
Isabelle Michelet: Now, that is a great question because the answer is not what would people think. We often hear that the last mover tends to be disadvantaged compared to those who already have some market experience. But in this case, it is rather the opposite.
The fact is that developing countries (such as Cambodia or even Thailand for example) simply did not have the intermediary technologies available in the Western World. Thais had very few landline telephones, so they jumped on mobile phones as soon as they were available in the early 90s, and fast became much more versed in this technology than Westerners. Cambodians never had any connected technology until the Australians came with an aid program and installed the latest Internet infrastructure, light and efficient; unencumbered with previous experience, their adoption rate was very fast and you can see Internet cafes throughout the country, including in the middle of nowhere. Even online medical consultations appeared and became common in no time while they still barely happen in Europe, where alternative solutions exist.
Does it mean that change implementation happens easily in Asia then?
IM: Again, the question is complex. The young Asian populations have indeed adopted new technologies very rapidly in their daily life and have a very easy relationship with these.
But implementing change within business organizations is something else. Including change into business strategies requires accepting change and building a process to make it happen. In Asia, the field reality is that medium or large companies which could largely benefit from technological change are family businesses based on oligarchic structures. Traditions have a very important role to play and, as a result, accepting the idea of institutionalizing change with a process is not easy.
How do things happen, then?
IM: Asian family-owned conglomerates tend to use the “lab approach”: they ask a team to test something new (product, technology, etc.) and see what happens. Lessons are then drawn for the experience, and if worth it, the technology is then implemented more widely. This is a very pragmatic approach that works very well in Asian environments: what, how, for what results, then let’s do it.
Interestingly, Westerners based in Asia have hardly adopted this model, because they usually have to follow their headquarters’ directives and policies. So a decision is taken somewhere to introduce this or that technology, and the whole group complies, come what may. Local people are not invited in the process and are just faced with the obligation to use whatever has been installed. Outcomes are often disappointing and expensive.
Different mindsets then?
IM: Let’s be careful about abusive generalities. But yes of course, Asian and Western mindsets are very different, at work as well as beyond work. Westerners usually set a target and endeavour to reach that target, rain or shine. Asians tend to observe their environment and react to what is happening, grasping opportunities and ensuring that all stakeholders are satisfied in the process.
However, the socioeconomic changes unleashed by the new technologies are pervasive globally, and whatever the way organizations have been facing these changes, there is a certain degree of convergence today in the corporate realities: connected technologies have become unavoidable, people are no more interchangeable and are instead recognized as unique sets of valuable competencies, etc.
What is the difference in approach between small and large businesses?
Isabelle Michelet: Small businesses have no budgets for expensive, heavy systems like Oracle or SAP, but they know they need the functionalities; so they often go for smaller, affordable solutions that are developed fast and specifically for them, and that can easily be replaced if the needs change. These small businesses are truly agile, with a strong test-and-measure culture and a very pragmatic mindset compared to larger companies, which have to carry the weight of politics and sheer volumes (number of computers and people affected by the change).
What is the biggest challenge?
Isabelle Michelet: The big challenge is for businesses to realize that change needs to be strategized. First, you need to plan, otherwise, you spend your time wondering how to cope up with new developments.
Second, you need to reconsider how you deal with the technology. From a human perspective, I mean. See for example the IT Department. In so many companies these people are still in charge of maintaining and developing hardware and software, hence are expected to demonstrate mainly technical competencies – even though such competencies are obsolete terribly fast. But how many IT teams really have as yet, the ability to diagnose business needs and translate these needs in terms understandable by technicians, so as to identify the best-fit technical solutions?
Indeed, to optimize technology integration requires that the IT team be composed of change strategists and business-oriented people. The technical aspects can be outsourced, and they already often are in Asia. Outsourcing is in fact a rather long-standing practice throughout the region, whereas Westerners often hesitate, fearing loss of control.
The integration of technologies in the daily working life does not impact only the IT Department of course. Everybody is affected. For example, it has been demonstrated that excellent salespeople usually hate paperwork – and computer work even more! Yet, nowadays, salespeople are often expected to input lots of data, about customers, market trends, products etc. So, what to do? Employ hybrids who can do a bit of both, like many cost-focused Western companies do, or employ a team including a salesperson and a sales admin, like skills-focused Asians tend to do?
Do you think that these changes impact everybody in the same way?
IM: No. We need to make a short digression here, about Generations. Since people can use comfortably only the tools that were already in existence when they started school, this means that the so-called “Gen X” (born 1960-1975) who had to learn computers at post-adolescence stage, is very different from the “Millennials” (born 1975-1990) who were born with computers, and from the “Gen e” (born 1990-2005) who was born with the networked technologies. Typically, a Gen-X like me produces complex statistics on a computer – and then checks the results manually just in case. Gen-e don’t think to question their computer any more than the TV or the refrigerator. This means that young employees can be expected to be more comfortable with new technologies. It does not mean they can immediately strategize the introduction of a new technology in the company, especially if they do not know much about business yet.
Westerners often oppose generations, Millennials against the rest. How does this work in Asia?
IM: We do not speak about opposition in Asia, firstly because confrontation is viewed as a very negative, aggressive and conflictual practice, and secondly because respect for elders is central to all Asian cultures. This does not mean that they are no differences between generations in the region. Of course there are. In fact, studies have shown that in the mid-2000’s, Asian youngsters started to feel closer to Western youngsters than to older people in their own culture. A sign that the generation phenomenon is global, albeit expressed differently. I am indeed asked to conduct seminars on how to manage generations everywhere in the region.
What is the impact from an operational perspective?
IM: Well, in theory, neither age, nor any other diversity factor, should have any impact on recruitment and employment. What matters from a human resources perspective is the skills you have and the value they represent for the business.
But the point is that new generations have skillsets and strengths that are different from what previous generations had at their age. Meanwhile, organization structures have not evolved much and Millennials are put in positions that do not fit their competencies. So, they are frustrated because they feel they could do much better, while their bosses are frustrated because “these youngsters want many things but cannot even do what I did easily at their age”. The misunderstanding can lead to terrible situations, especially in the Western world, where young people can find themselves in underpaid jobs for which they are way overqualified.
IM: Of course, things are changing – although maybe not as fast as the Millennials would like. Under the impetus of start-ups for example, the notion of project work has found its way through to all types of companies. Even those that maintain their traditional vertical hierarchical structures are learning to organize some work as projects. And projects are a great way for Millennials to get empowered while being monitored or even tutored.
You mentioned a second major trend when we started this discussion, could you elaborate?
Isabelle Michelet: The other major trend relates to macroeconomic change, and like new-technologies-led socioeconomic changes, it is global. Global economic leadership, which has been the West’s privilege for the past five hundred years, is now clearly shifting to Asia – although many Westerners do not seem to realize it yet. But let’s remember that the current Western economic model is based on growth. And Western economies have had minimal growth for 30 years. In parallel, Asian countries, whether they are dubbed “dragons”, “tigers” or simply looked down upon as mere “developing countries”, have had economic growths of 5-to-15% (with a few bumps on the road) for 30 years. Guess what? Asia now represents 31% of the world’s US$80 Trillion economy, far ahead of the USA (24%) and Europe (21%).
So that leads to another challenge in terms of change management, right?
IM: Yes indeed! Because many of these Asian countries, whether ex-colonies or not, have developed and used a “poor little brother strategy” with the mighty West – very successfully! This way, they profited from Western investments, export quotas to Western countries, and aid of all kinds. But the recent negotiations within the ASEAN to set up the AEC acted as a slap in the face of these countries, including Thailand. They were forced to realize that far from being the poor little brother anymore, they had become a major power in Asia and needed to act as such: import from ASEAN, invest in ASEAN countries, welcome ASEAN workers who hurry to come and enjoy Thailand’s quality of life and purchasing power… Thailand is still quivering from the shock but has nowhere to go right now but up – in a scary big unknown…
Down from macro- to micro-economy, changes are starting to be visible within companies as well, because the “good-only-to-execute-and-copy” image is truly gone. Asia is a world leader in many areas, including creativity-strong sectors. So the type of people we want is changing – and Asians are agile enough to develop required skills.
When people talk about doing business in Asia the idea is often to describe the region as a place where you can find cheap labor.
Is this changing, then?
IM: This is definitely changing, yes. The Industrial Era is long gone, when companies were looking for interchangeable labor. They now need qualified knowledge workers that bring a unique set of competencies to the organization. This has been understood over the last two decades as the need for university graduates – and even though the percentage of graduates has greatly increased everywhere, the largest numbers can of course be found in Asia, if only because of giant Chinese and Indian populations. In a world where recruitment has become global, it does seem easier to tap these huge resource pools, especially since young Asians appear more flexible, less aggressive than their Western counterparts. But beware of painful disillusions! Firstly, although some Asian universities are certainly among the best in the world today, others are far behind international standards, and there are huge differences in value among degrees. So, a degree today can no more be considered a guarantee of competencies, which makes candidate evaluation that much more complex.
Secondly, the notion that a university graduate is automatically more qualified than lower education holders, although rather strange when you think about it, has been leading to excesses in the West, with the painful outcomes we can witness today: many graduates are unemployed or under-employed while overburdened with debts due to their long studies. Meanwhile, precious technical competencies are lacking because they were not valued. Asia has been more circumspect in its recent evolution, and many technical schools churn out valuable technicians. It is to be hoped that the region will not follow Western trends in this respect and will keep university graduates down to a viable percentage, while recognizing the value of other much-needed types of competencies.
Isabelle Michelet | Strategic & HR Management Expert Contributor.
Ms. Isabelle Michelet has 30 years’ experience in economic analysis, strategic, change, resources and knowledge management consulting and research in a global environment.
Based in Asia for the last 30 years, she lived and worked in Japan, Vietnam, Singapore, and Thailand, as well as in France and Switzerland.
She was successively Country Manager (Thailand), Area Manager (Mekong) and Global Research Manager in the international HR management consulting firm CRG, then Knowledge Manager in American human resources consulting giant Mercer.
Extensive socio-economic research on change and its impact on business led her, in partnership with two other principal consultants, to create and lead Prasena, a global consulting firm helping MDs and Executive Committees to integrate human, technological, financial and intellectual resources management with strategic management. Building upon such accumulated experience, she is now focusing more on strategic business
planning, change management and executive coaching.
Disclaimer: The views expressed are those of their author(s) only and do not reflect those of The Asia-Pacific Circle or of its editors unless otherwise stated.
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