Culturally speaking

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Expat executives speak up at the recent Asia CEO Forum’s Leadership Summit about Filipino idiosyncrasies and how these factor in to their corporate strategies.

 

As a growing number of global organizations seek competitive advantage by entering emerging markets to develop new products and create economies of scale, the world is also seeing a rise in the number of cross-border workplaces in developing countries like the Philippines.

In the recently held Asia CEO Forum Leadership Summit, two expat company chiefs highlight the importance of creating company strategies that would bridge the gap between local and foreign culture. The first step, asserts Global Process Manager, Inc. President Erik Nielsen,is becoming aware of how another culture perceives one’s own. “In my nine years here, I’ve seen that we (expats) shouldn’t try to implement strategies the way we do at home. Instead, we should understand the situation around us,” Nielsen says.

 

Cultural Differences

In the speech he made before an audience of both Filipino and foreign company executives, Nielsen, who hails from Denmark, shares commonplace work scenarios that illustrate how differently Westerners and Filipinos handle these situations. “In Denmark, we believe in equality so the boss may just have one more stripe on his shoulder but he’s very much part of the team. He takes his share and is expected to—he’s not someone hiding in a corner office. In fact, he probably doesn’t have a corner office—there are companies in Denmark where the CEO has to come in everyday and find his workstation among his people. Whereas in the Philippines,” he remarks, “there is an almost god-like respect for the boss.”

Westerners, who highly value individuality, tend to think in terms of what’s in it for them in terms of numeration or promotion. Because of a culture that’s largely family-centric, Filipinos tend to move in groups. “They have this wonderful barkada setting where everything is done in groups—and that’s actually great especially in a hiring situation. If you hire someone, and he/she recruits his/her friends, you can end up with five new hires. But this idiosyncrasy could also go the other way around, to the great frustration of managers here. It could work both ways,” he says.

The same can be said when it comes to dealing with conflict. Europeans tend to confront people head on—“And it’s not because they’re angry at you, but at the situation,” Nielsen says—while Filipinos “tend to put a brave face on. But beware,” he says lightly, “there’s always something underneath, and it may only come out the day they give you their resignation letter. This is also a frustration of most managers as people choose to resign instead of approaching people to actually change the reason to resign. Instead of trying to improve on it, they just leave.”

Filipinos not only tend to avoid conflict, but problems as well. “Problems are there to be solved, but some Filipinos may think that if they just leave it alone, it will go away. But I tend to think that the first mistake is often the cheapest so let’s try to get straight to it and get it resolved,” he says.

 

Managing Culture

Clearly, successful management of a workforce whose culture is different from one’s own lies in the willingness of the leader to listen to his people. Such is the case of another speaker at the summit, HGST Philippines President and General Manager Chandra Anamirtham, who hails from Malaysia.

While most of the free world was moving manufacturing to China in 2007, Hitachi Global Storage Systems (HGST) took a great risk when it transferred a chunk of its single slider manufacturing business from Mexico to the Philippines. The move proved to be worth the risk as HGST was not only able to grow its manufacturing capability threefold from 2007 to 2013, it also grew its new technology capacity. “By new technology capacity, we mean things to do with research and development. We had almost zero in 2008, but now our new technology capacity comprises almost 70 percent of the jobs in the Philippines. This [function] was always done in the U.S. and Japan, but we were able to transform that because of our ‘PEOPLE’ formula,” Anamirtham shares.

More than anything, Anamirtham’s PEOPLE philosophy—an acronym for Principle, Empathy, Out of the box thinking, Process approach, Leadership and Excellence—is an example of good culture management. Whereas most manufacturing companies rank products as their top priority, HGST prioritizes the quality of its people. One way HGST achieves this is by what Anamirtham calls “listening with empathy.”

“You have to experience the team and not just listen to them. That is the key for transformation,” Anamirtham shares. “In our company, I make it a policy that every Wednesday, from 11 a.m. to 1 p.m., I have to go to an employee’s house. We bring lunch, we sit down with them and talk to them. Their parents and neighbors even join in the discussion. This eventually transformed into a ‘Group Kumustahan’ so we can engage more employees. We would have brunch outside the factory, and this is how we hear from our employees,” he says.

The information gleaned from these kumustahan sessions eventually lead to out-of-the-box engagement strategies that HGST has implemented over the years. “In one of the kumustahans, we discovered that people were not using their insurance and government benefits for their families because a lot of them weren’t legally married as they could not afford it. So what we did was we arranged a mass wedding—whoever wanted to get married can do so in the mass wedding. We provided everything, from the bible to dinner for a party of six each, and the only thing we did not provide was a husband/wife because they had to bring that themselves,” Anamirtham jokes.

Another kumustahan session revealed a desire among lower ranks to become engineers, which led HGST to partner with CHED and DepEd to form the ETEEAP or Expanded Tertiary Education Equivalency and Accreditation Program. “It’s an in-house bachelor degree program and we set it up in a way that we hold classes in our factory on Fridays and Saturdays. In November of 2011, we had 206 graduates from that program; last year, we had 95, and this year 180. This not only benefits our employees, but HGST as well, as it caters to the company’s need to grow faster and continuously create talent,” he shares. In 2007, HGST had roughly 50 expats in the factory handling managerial roles. Today, Anamirtham proudly shares, “we have less than 10 because the locals took over the functions.”

All these engagement strategies, Anamirtham says, “we got these ideas because we talked to our people—we took their suggestions, and we did something. We have to create a sustainable talent pool here in the Philippines. In my own opinion, the Philippines is favorable today because of the cheap labor, but one day, maybe 15 years from now, that would not be the case. To make this place sustainable, we need to bring research and development to the country. We need to be engaged in that sector of the business. To make that happen, we need to develop local leaders.” (Manila Bulletin)