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Innovation

Category: ASB Thought Leadership

The ASB Thought Leadership delves into the profound essence of being an extraordinary and unconventional member of the ASB community at all levels.

Central bank digital currency (CBDC) is a hot topic in today’s digitally-driven world, especially seen through the lens of Covid-19. Since China began working on its Digital Currency Electronic Payments (DCEP) project in 2014, and the Bank of England first raised the concept of a central bank digital currency (CBDC) in its 2015 research agenda, interest around CBDCs has become prevalent.

A recent BIS (Bank of International Settlements) survey of central banks found that 80% were exploring their own central bank digital currency, with this figure expected to rise further this year. “When the Libra project was announced in 2019, central banks’ interest intensified and they began actively experimenting with the opportunities presented by exploring their own CBDCs, as a working paper issued by the BIS found.

Before that, there was a lot of hesitancy towards the idea of a digital currency. When Facebook announced that Libra would be backed by a consortium of prominent multinationals, central banks especially started to take notice,” explains Professor Ong Shien Jin, Professor of Practice at ASB. With over 4,000 cryptocurrencies currently in existence, why did Libra catch so much attention?

“Libra, now renamed Diem, is not the first stable coin,” explained Professor Ong, “But it’s the most prominent one proposed thus far. Unlike Bitcoin, its value is intended to be kept stable, backed by reserves of fiat currency. And in the case of Libra, it also enjoys the backing of credible multinational firms. Recently, the Financial Times reported that Facebook plans to launch a limited format of the digital currency in early 2021.”

The world’s central banks have acknowledged the impact that digital currencies and digital payments are having on the financial system and economy. Big tech companies like Ant Financial (the umbrella under which Alibaba products like Alipay sit) have grown from offering e-wallets to offering online credit. Today, Ant Financial reportedly has around $600 billion in assets under management.

Yet there are many concerns posed by companies like Ant Financial, ranging from systemic risk to the financial system, to anti-money laundering, privacy concerns, bank disintermediation, interoperability of distributed leger technologies with existing systems, and ensuring that an appropriate regulatory framework is in place. All of these are issues central banks around the world are considering as the extent of digital payments grows.

The case for central bank digital currency

Central banks considering their own digital currencies have many reasons to do so. “There are many reasons for central banks to consider a digital currency of their own,” explained Professor Anella Munro, Professor of Economics at ASB. “For some, it is efficiency, where existing cash-based systems are cumbersome and risky (for instance, shipping cash between islands in the Caribbean).

For others, it is driven by the dwindling use of cash. For others, it is providing central bank money that is interoperable with digital payments technologies, to support their development.” “Additionally, for emerging countries, financial inclusion is an important concern. Digital currencies can allow citizens to transact more easily,” added Professor Munro. “You may say, sure, but that can be done with e-wallets.

But there’s another benefit for central banks to have their own sovereign digital currency on a wholesale level. When money is transferred between banks through electronic payment service providers, these are done using reserves in central banks. As part of this process there’s a settlement stage, and interoperability is important. A decade or two ago, real-time settlement was a big topic in banking, and that settlement is fast in many countries.

Today, central bank digital currencies based on blockchain offer a promising solution for finality, since you can’t edit the ledger, but the technology may not be there yet, in terms of speed.”

Additionally, central bank digital currency could enable “enhanced and faster transmission of monetary policy”, through being able to implement negative interest rates with fewer constraints, according to Deputy Managing Director at the IMF, Tao Zhang. It could also cripple tax evasion and underground economies that flourish with the circulation of paper money (Rogoff, The Curse of Cash, 2016).

Central banks say more research into digital currencies is needed

Despite the potential benefits, very few central banks have launched their own central bank digital currency to date. One of the world’s central banks leading the way is Sweden’s Riksbank, in response to dwindling use of cash. The Riksbank has been researching the potential of a central bank digital currency since 2016, and has launched a pilot project with Accenture Plc to introduce an electronic krona, according to Bloomberg.

A study launched on the feasibility of a potential transition to e-krona is expected to be completed by the end of November in 2022. However, other central banks are taking a more cautious, wait-and-see approach, including the Bank of England, whose governor Andrew Bailey told Bloomberg, “We’ll go on looking at [the possibility of introducing a digital currency], as it does have huge implications on the nature of payments and society.”

In the US, the Fed is working with MIT Media Lab on CBDC experiments under MIT’s Digital Currency Initiative to explore the potential opportunities, challenges, and tradeoffs that a CBDC will bring.

In Europe, Germany’s Federal Ministry of Finance released a position paper in July 2020, noting that although a digital euro could be beneficial in reducing transaction times and costs, it could also have “comprehensive implications” for the stability of the entire financial sector, requiring further analysis.

Asia is a leader in central bank digital currencies

China is leading and dominating the digital payments scene with Ant Financial. However, Ant’s scale is a concern for the country’s central bank, which recently suspended Ant Financial’s IPO that was set to raise $37bn in the world’s largest IPO, to ensure compliance with a new regulatory framework designed to safeguard the interests of financial consumers and investors.

The People’s Bank of China (PBOC) has also announced its own digital yuan currency, and has tested the Digital Currency Electronic Payment (DCEP) system in 4 major cities. Beyond China, the outlook, in Asia, on central bank digital currency seems to be more optimistic. Cambodia has been investigating the development of a central bank digital currency since 2017, having relied heavily on the US dollar for decades.

After a series of pilot tests, on 28 October 2020, Cambodia officially announced the launch of “Bakong“, its central bank-backed digital currency which supports transactions in the dollar and riel, the Cambodian currency. Bakong could allow Cambodians the opportunity to bypass card-based payments altogether and leapfrog straight to a cashless digital system.

Meanwhile, a joint project between the Bank of Thailand and the Hong Kong Monetary Authority (HKMA) saw the successful trialing of a Distributed Ledger Technology (DLT) for cross-border fund transfers, under Project InthanonLionRock.

Aside from China, Cambodia, Thailand, and Hong Kong, multiple other Asian countries are exploring developing and experimenting with forms of national digital currencies, including India, Indonesia, Vietnam, the Philippines, Korean, and Japan. Japan has already announced its plans to test its digital yen in 2021.

Helping banks understand the digital currency landscape

While the potential of CBDCs is promising, there are tradeoffs in introducing a central bank digital currency. To help central banks think about the opportunities and risks presented by sovereign digital currencies, Professors Munro and Ong at the Asia School of Business have begun teaching custom-built courses centered around digital payments and central bank digital currency.

Professor Munro, Professor of Economics at ASB, brings with her over two decades of experience in international macroeconomics, macroprudential policy, asset pricing, monetary policy, and international finance at the Asian Development Bank, the Reserve Bank of New Zealand, and the Bank for International Settlements. Complementing Professor Munro’s expertise in policy and regulation, Professor Ong, Professor of Practice at ASB, possesses a wealth of market experience.

With a background in computer science, he started out his career at Goldman Sachs and then joined the tech industry at JobStreet.com, the #1 online job portal in Southeast Asia. Professor Ong also holds a PhD in Computer Science from Harvard University and a Bachelor of Science in Mathematics from MIT. Together, their complementary skillsets enable them to provide in-depth insight into topics such as:

  • Overview of the existing digital payments landscape to set context
  • Reasons for implementing CBDCs and what types of experiments are currently underway in various central banks across the world
  • Design tradeoffs at the wholesale and retail level
  • Private alternatives to central bank digital currency
  • Case studies from countries who have trialed or launched CBDCs

“We’ve had some interesting discussions in these classes, given that our participants come from the emerging world. In Malaysia, we have Touch ‘n Go’s e-wallet being a partnership between Alipay and CIMB, and we discussed – how does this impact us in the emerging world? Would you want the big boys to come in and partner with your local banks or is there merit in homegrown fintech providers?” said Professor Ong.

“I hope that people will walk away from these sessions with a keener sense of the potential of the new technologies, understanding the pros and cons, and the complexities of digital currencies. We aim to help participants take a holistic approach,” he added.

World-class knowledge transfer on pressing topics for central banks

Beyond teaching these intensive courses on digital currencies, Professors Munro and Ong are also part of the faculty for the Asia School of Business’ (ASB) Master of Central Banking program, a joint partnership between MIT Sloan and the central bank of Malaysia (Bank Negara Malaysia).

The Master of Central Banking program is a 12-month residential degree program focusing on offering a comprehensive, first-of-its-kind curriculum that integrates all the core functions of central banking as well as leadership and governance. It is designed to prepare participants for future challenges, in light of the technological and economic changes taking place in today’s world.

“What’s exciting about the Master of Central Banking program is that it provides an integrative, forward-looking and global perspective on central banking. It combines the Sharp Skills – the more technical side of central banking – and Smart Skills – drawing on our MBA leadership curriculum. A significant portion of the course (30 per cent) is taught by professors from MIT, and the program includes six weeks at MIT Sloan, in Cambridge, Massachusetts.,” explained Professor Munro.

In addition to offering a Master of Central Banking program, ASB is also home to its Central Banking Research Centre, which offers fellowships to outstanding individuals in the field of finance and central banking, to promote research, exchange of information, dialogue, and professional interaction on topics related to central banking. This includes an ongoing webinar series Conversations on Central Banking, that tackles current issues in central banking and features former central bank governors and MIT faculty.

Demystifying the Fast Changing World of Digital Currencies

Iclif Executive Education Course by Professors Anella Munro and Ong Shien Jin (2-day online course)

The next course will be held on 3rd and 5th May 2021, from 9.00AM –  12.15PM. If you are a non-specialist, who wants to be able to make sense of, and be current on, the fast-evolving world of digital currency, this course is for you. To download the Course Guide and for more information on upcoming courses, register your interest below:

Master of Central Banking Program (One-year residential Master program for Central Bankers)

The Master of Central Banking (MCB) is a year-long residential program designed especially for central bankers. Participants will benefit not only from a curriculum that focuses obsessively on central banking, but also from the intense, hands-on experience of working in teams. To download the MCB brochure and for more information on upcoming events, register your interest below.

“How do I overcome burn-out? Will power corrupt? Why do I always face resistance? What is the difference between leadership and management? How will I excel at both? Where am I on my leadership journey?…

These are, of course, complex questions with complicated answers. Seeing and understanding the journey that leaders go through, however, can give you a map to see where you and your team members are, and how to address the challenges you face. This holistic framework empowers you to move forward confidently.”

The above was an extract from my Masterclass session: The Leadership Energy Journey shared at the 8th Leadership Energy Summit Asia on November 19, 2020. LESA is our annual leadership conference hosted by the Iclif Executive Education Center at Asia School of Business. This year’s virtual setup drew close to ten thousand attendees from across the globe. Each of the Masterclasses were a 30-min showcase of ASB faculty’s research focus.

I was nervous, to say the least. This would be the first time I spoke globally about this novel leadership framework, since the publication of my book The Leadership Journey (2018) in Thailand. In fact, the nerves persisted until I received my session’s feedback from Serena yesterday. The comments in that report put me at ease.

“Very true what Dr Thun shared.”
“Such a good presentation to check where are we heading to and keep focused on it.”
“Very practical session. I believe the Leadership Energy Journey is crucial and critical for an individual or an organization to excel further. Awesome presentation.”
“Great session! Wished the session to be longer so that we’ll have interaction on this interesting topic. Thanks!”
“HR should bring this course to conduct for our leaders.”

In this piece, I share with you some key ideas from that session so that you can judge for yourself. Is leadership an art? Or science? Or both? Well, leadership may be an art. But energy is a very scientific term. Like Einstein said, everything in the universe is energy. It is the smallest common denominator that ties all things together. Thus, leadership is also about energy – and a leader’s job is to use it to create a better future.

Leadership is the art of harnessing human energy to create a better future. Mankind has studied energy for thousands of years; with observations noted; experiments conducted; hypotheses tested, and laws written. Given that Iclif’s leadership definition draws a linkage between the two, I thought it would be useful to look at the art of leadership through the lens of energy science.

One property of energy is flow. Electricity flows through circuits causing the voltage that powers your light bulb. Water flows through rivers and streams to create currents. Wind is cool air flowing low to replace the hotter air that rises. My doctoral thesis was on the flow of electrons from the food we eat to the energy we have to do things – a flow of chemical to physical energy.

The laws of energy themselves are also a flow: energy converts → energy releases → energy stops.

From Laws of Energy to Leadership Energy Journey

Humans have been leveraging this flow of energy to create useful work since our first days. From the beginning, we hunted the physically superior mammoth by dropping it off a cliff – converting gravitational to mechanical energy. We made our evolutionary leap by burning wood to make fire – converting chemical energy into heat. Then, we used the steam-turned turbines to generate electricity – converting pressure into electrical energy.

Decades ago we even learned how to split the hidden potential within atoms to release nuclear energy. And recently, humans have been investing in more sustainable energy conversions such as solar and wind. What if we were to view leadership as a flow of energy, too? Could there be a useful relationship to help us in making the most of our own potential?

The Leadership Energy Journey is a pathway that overlays the scientific concepts of energy onto the art of leadership. It guides leaders to navigate their flow of energy to create the most useful output and sustain its longevity. The journey is made up of 8 key mileposts:

The journey and these mileposts follow, literally, the natural process of how energy converts. It is the same overarching process that we would go about designing a battery or building a dam. A tree growing in the forest channels its energy through the same route. Chemical reactions in our body help us to extract energy from food in this similar manner.

The laws of energy have been proven to be universal to all things on earth. Thus, the Leadership Energy Journey is not simply an artificial collection of items leaders should do. It is the governing path that science has uncovered for years regarding how energy flows.

Allow me to give a broad understanding of these mileposts. For those with an appetite for practicality and action items, I also highlight the corresponding Executive Education courses of Iclif@ASB where you can build your respective skillsets for that step of the journey.

Milepost 1: Start Now! discusses the fundamental nature of our brain – It is lazy. The brain is an organ that evolves to fill certain roles for the body, much like the heart, the lungs, the legs, etc. Its mandate is to keep the body alive. The brain’s functions, however, consume energy at a furious rate – approximately 20% of the total.

As such, its default mode is to conserve as much energy as possible in case a tiger, or a boss, walks by. Unfortunately, this also means that biologically speaking, the brain keeps us in ‘auto pilot’ mode whenever possible, which leads to complacency, hubris, and confirmation-bias, among other symptoms. This first step serves as an importance reminder that leadership is a choice.

Leaders need to be proactive about shifting the world, or at least their environment, towards a better future. Stories of popcorns, plane crashes, and failed business changes demonstrate the neuroscience of our comfort zone in the program Brain-BASEd Leadership: The Neuroscience of Personal and Organizational Agility.

Milepost 2: Discover Who You Are discusses the meaning of leadership ‘potential’. In science, the term potential refers to a ‘difference’ of states. The apple that hung high on its branch had more potential than after it had fallen on Newton’s head. A raised hammer has more potential than one that sits on the floor thus it could be used to drive the nail. Hydrogen and oxygen have higher potentials so when water forms heat is given off.

The ability for energy to do useful work arises from the dissipation of such potential. Similarly, to build up our leadership potential we need to create a difference of states. Leaders do this by driving apart the ‘present’ and the ‘future’. The greater the gap between how one perceives the current world and the future possibilities, the greater one’s leadership potential.

This step stretches our integrative thinking between art and science. The linkage between leadership energy and one’s values & purpose was described at length in Iclif’s previous two books Too Many Bosses Too Few Leaders (2013) and Open Source Leadership (2017) by Rajeev Peshawaria. Leaders are encouraged to introspect, visualize, and even verbalize their two states. The program Leading Self and Others offers support to facilitate this uphill climb part of the journey.

Milepost 3: Cross the Activation Barrier introduces the concept of the ‘activation barrier’. This is a rather interesting phenomenon that basically says: it takes energy to release energy. All changes in life require an input of energy to unleash. Newton’s apple needed a gust of wind to push it off the stem before it could accelerate towards the ground. A gun needs its trigger squeezed before the bullet can fly out of the barrel.

Even lighting a fire requires the striking of a match to get the initial spark going. In leadership, we see similar observations. All changes are faced with resistance, and all leaders must persevere over these activation barriers before a chain reaction of productive output can be generated. Unfortunately, many fail to lead because they give up before the floodgates can be opened.

This step is about helping leaders to release their leadership energy. Being able to reframe challenges as not resistance but rather an opening of a gate is already a helpful mental model for aspiring leaders. Our Emerging Leaders immersion program can be a great catalyst (an agency that helps lower the activation barrier) for developing leaders to overcome this barrier.

The 3.5-day residential program also allows participants to build their leadership resonance (having others to reinforce your potential) and leadership fusion (a process of unleashing the power within).

Milepost 4: Feel the Energy Flow describes the first downhill portion of the journey. When the built-up potential is released, energy transfers. Think of a dam that lets go of its water; you see the earth-shattering power that is set free. Once we have clarified our values, found our purpose, and overcome our activation barrier; the released energy will make us feel energized, unburdened, and free.

When your leadership potential is triggered, the released energy may literally overwhelm your physical capability. Have you ever experienced a blast of ideas and were frustrated by your fingers not keeping up? Or have you ever been so determined to make a point that your mouth couldn’t form words fast enough? These are situations when your energy is being released at a furious rate; analogous to the dam breaking.

This step focuses on leaders recognizing and controlling the freedom that comes with this release of energy. The program Managing by Freedom Within the Framework addresses this core question: How much freedom is productive? Can you give your people freedom while avoiding unnecessary risks?

When might you be operating outside the safe zone? This course introduces the leadership tools necessary for allowing an appropriate degree of freedom. The content is especially useful when managing younger leaders who are generally very driven by their sense of autonomy, passion, and energy.

Milepost 5: Channel Towards Usefulness is when leadership skills begin a transition towards management skills. Energy itself is value-neutral and having it doesn’t always equate to being productive. Have you ever seen energy spent on tasks that are not useful? For example, when office gossip is so tempting you’re your people are unable to pull themselves away to finish that (much more important) marketing plan.

Or giving the first impulsive answer that comes to mind when an unexpected problem arises, only to regret it later. Or even filling our lives with urgent tasks while postponing less time-critical yet supremely more important matters such as family and health. Or avoiding a personal confrontation, even knowing that delaying this will have a negative impact on the team.

The root of each of these situations is the same – it reflects on how well individuals channel their energy.  As a leader, you don’t just manage your own energy; you are also responsible for managing the energy of each member of your team. This step is where much of the people management capabilities are discussed. Managing Performance, Strategic Mindset, Catalytic Conversations, and our Coaching are some of the skills in which leaders must be well-versed to help their team to achieve its goals. 

Managing Performance addresses managerial components that enable people to perform well. Strategic Mindset builds the ability to envision a desired future and to plan towards it. Catalytic Conversations keep people focused on what matters with accountability. And Coaching empowers your team members with the capability to take charge of their own destiny.

  1. Milepost 6: Celebrate Success is about cherishing our accomplishments. On the Leadership Energy Journey, there are two ‘viewpoints’ where you should feel joyful:
    at the end of Milepost 2 when you have discovered who you are through achieving clarity on your values and purpose; and
  2. here at Milepost 6 where your work and efforts are paying off. At these two stops, you should feel a different sense of pride – the first from an internal realization that you have uncovered your core, and the second from recognizing your leadership output. As a leader, you must make sure your team members feel that sense of celebration, too.

A program that is useful to reiterate this step is Innovating Inside-Out: Becoming the 1%. Nothing provides a sense of accomplishment like being able to create something new that contributes to a better future. In the open source era, the barrier to innovation has been drastically lowered.

Everyone can be significantly better and faster at innovating. Appreciating how innovation has changed in the 21st Century, the Innovating Inside-Out session aims to challenge the outside-in organizational approach to innovation. Instead of looking externally for the next best ideas, this course ignites and grows the inner innovator DNA from within, and with it that intrinsic sense of pride.

Milepost 7: Replenish the Energy discusses ways in which leaders can restore their leadership energy. In this fast-paced, high-demand world, many leaders are too busy with busi-ness. Exercise is a great way to replenish energy. Dr. John Medina, author of Brain Rules: 12 Principles for Surviving and Thriving at Work, Home, and School described a 17% performance increase when college students used the treadmill for 40 minutes before taking exams.

Moving around is good for thinking as more blood is supplied to the brain. Interestingly, humans in modern times make most important decisions sitting down. Sleeping is also another powerful technique to recharge. The Federal Aviation Administration requires that pilots have eight hours of uninterrupted sleep in between their eight-hour shifts. In 2011, new regulations for medical residents went into effect limiting work hours to ensure that doctors get enough sleep.

Eating breakfast, short meditation routines, mindfulness in the workplace, and stress management are more examples of practical actions being taken to help leaders restore their energy. When designing a leadership development for clients, we make sure to include components that allow the participants to replenish their leadership energy.

Sometimes it is a physical replenishment; like morning activities or mindfulness practices. Sometimes it is an affect replenishment; like being on a new adventure together with your friends. Even an intellectual replenishment helps to sharpen one’s saw; like attending our annual Leadership Energy Summit Asia where global speakers are brought together to stimulate your leadership energy.

Milepost 8: What’s Next? is the last but perhaps the most important milepost. It reveals that the Leadership Energy Journey is not linear but rather a continuous loop. While that final summit is the better future, a leader can only try to progress as far as possible towards it – one goal at a time. Sustainability is about the relentless push to keep moving.

Take the life cycle of water: rain falls on the mountains; it collects into streams, rivers, then oceans; the water evaporates back into the air and condenses into rain and the process starts over. Or take a simplified life cycle of retail banks: money comes in via deposit; it is reinvested via loans to customers; projects generate profits that come back as more deposits and the loop propagates.

The leadership energy journey is the same; beyond the hill climbed there is the next one – hopefully each time becoming a little bit better. There are two kinds of people in the world: those who cannot wait for retirement and those who never retire. In this case, the latter have figured out how to sustain their leadership energy by recognizing the infinite loop, and learning how to ride its flow.

If you are interested in becoming one of these, or to learn where you are and how to overcome the current barriers, while figuring out what your next steps towards the future might be, you’ll want to be part of our Leadership Energy Journey: Deciphering Secrets of Long-Lasting Success at the next calendar event.

I hope to walk this very enlightening journey with you. Till then, stay safe and lead well.

Dr Thun Thamrongnawasawat (Tan) is one of the foremost experts on dissecting complex management and business models and cascading them for easy implementation by companies across different industries. His innovative B.A.S.E. model has inspired numerous organizations to transform.

He’s the author of the Brain-BASEd Leadership book series (2013-2016), a bestselling The Leadership Journey (2018) and a regular newspaper columnist. In 2015, Dr Thun was the recipient of World HRD Congress’s “Global Coaching Leadership Award” and named “Consultant of the Year” by the Ministry of Industry, Thailand. He can be contacted at thun@asb.edu.my.

If you are interested to know more about our exciting Executive Education program click here.

Having been a leadership coach and consultant over the years, I have had many opportunities to be a part of organizational changes. In 2008, I was brought into a major family-turned-professional business to transform a top-down leadership model into a more decentralized approach. At the Kick-off session of this transformation initiative, the HR Senior Executive Vice President delivered her opening speech to the group of so-called Change Champions.

The speech lasted exactly one minute and consisted of exactly one slide. She said “As you know, the CEO wants a transformation. The organization needs to change, and you are the people selected to help lead this. Good luck and I’ll see you in 6 months”. The slide that accompanied her speech was a scan of the memo letter released by the Office of the President.

The texts were far too small to be legible, but you could make out the list of names and the CEO’s signature at the bottom. The irony of transforming towards an inclusive leadership model was uncanny. The SEVP then turned to leave the stage. On her exit she stopped, as if an afterthought has occurred, and spun around to point at me, “By the way this is Dr Tan. He is here to guide you all through the process. Best of luck. Everyone is counting on you!”.

I stood there with the mic in my hand. The room was silent. You could hear a pin drop. All thirty pairs of eyes were fixed on me. I started that session in a way I had never done before. I skipped my introduction, the objectives, the deliverables, the timelines; I skipped everything and started by asking these employees in the room, “How do you feel? Right now, give me one word on how you are feeling”. I then passed the microphone around for each to speak.

What do you think were the feeling words we heard that day? Positive or Negative? “Scared”, “Sad”, “Confused”, “Angry”, “Lost”, “Frustrated”, “Blurred”… one person said, “I have no feeling…” before adding a qualifier, “…this happens every time”. All thirty replies and not a single positive word. To think that this might be how most organizational changes start.

As an Asia School of Business (ASB) faculty, I’m going through the process called International Faculty Fellowship (IFF) with MIT Sloan. A part of that is my choosing to take an online Exec Ed course with Professor Deborah Ancona, who heads up the MIT Leadership Center. She will also be my IFF advisor. This self-paced course title is ‘Leadership in An Exponentially Changing World’.

The course centers on Sloan’s leadership model called 4-CAPS+ developed by Professor Ancona and her MIT colleagues, Thomas Malone, Wanda Orlikowski, and Peter Senge. They combined their collective learning, research, and experience to identify key leadership capabilities that underpin success: namely, 1) SENSEMAKING, 2) RELATING, 3) VISIONING, and 4) INVENTING plus an anchoring node called BUILDING CREDIBILITY. Each module is further elaborated with sub-dimensions.

Figure 1: The 4-CAPS+ model (executive.mit.edu)

For example, the story I shared above was my first true experience with what I now understand through the 4-CAPS+ model as Sensemaking and its four sub-dimensions. It starts with the importance of approaching a situation, especially ones with high sensitivity and volatility like driving change, with Open Mindedness. Such mental model would then lead to our Learning From Others, like I did that day about people’s true feelings as the team faced their challenging mandate.

From that point onward, we were able to work as a team to Creating Meaning from Uncertainty by agreeing that, while change may scare us, there are things that we can influence and control. The team together crafted our own vision of the change and a list of initiatives that we would Experiment.

With the recent integration of Iclif and the Asia School of Business, I tried to apply the 4-CAPS+ model to our post-merger challenges during Covid-19 time.

  1. SENSEMAKING – Each side of the integration needs to discuss their respective signatures in honesty and without prejudice. We must put on the single-organization hat and approach this challenge with a growth-mindset. Perhaps we could do a workshop on aligning our new culture, with an emphasis on showing vulnerability and honesty to create more trust amongst the current members.
  1. RELATING – Given Covid-19 and the restrictions (Malaysia is under our 3rd wave and currently under restricted movement control), it surely doesn’t help for people on each side of the integration to work from home and not be able to be with each other. Hopefully this ends soon, and as we all move into the new office, relationship amongst us improves and helps our mutual understanding of others.
  2. VISIONING – The business unit has operated since the integration without a Head, who left at the beginning of 2020. While the CEO has stepped in as an interim leader, he could only do so much. One promising news is that a dedicated head of the business unit has recently been brought on board. The vision would then be expected to get re-clarified and we can move forward towards a common goal again.
  3. INVENTING – Looking at the S curve of Executive Education and Higher Education as a whole, there is no denying that a new ‘log’ phase must soon be realized. Covid-19 has greatly impacted our classic business model, as physical learnings were all replaced by digital interfaces. The good news is, with our integration, the ASB umbrella is poised to offer a holistic solution that few in the industry can. There is great hope ahead, provided we can learn to work together synergistically.

+ BUILDING CREDIBILITY – For me this really is the key to the whole challenge. We need to readdress and have real conversations on our values, purpose, behaviors, management structures & processes, strategy, and performance.

Only when we realize that everything we do, individually and organizationally, all contributes towards our internal and external credibility, and we make the efforts to align these critical components, will ASB be able to establish our unique value proposition to the market and achieve sustainable success. What about your challenges? Given Covid-19 and the ‘New Normal’, how can you apply the MIT 4-CAPS+ leadership model at your organization?

Reference:

Ancona Deborah, Thomas W. Malone, Wanda J. Orlikowski, and Peter M. Senge. 2007. “In Praise of The Incomplete Leader.” Harvard Business Review, February, 2007.

Dr Thun Thamrongnawasawat (Tan) is one of the foremost experts on dissecting complex management and business models and cascading them for easy implementation by companies across different industries. His innovative B.A.S.E. model has inspired numerous organizations to transform.

He’s the author of the Brain-BASEd Leadership book series (2013-2016), a bestselling The Leadership Journey (2018) and a regular newspaper columnist. In 2015, Dr Thun was the recipient of World HRD Congress’s “Global Coaching Leadership Award” and named “Consultant of the Year” by the Ministry of Industry, Thailand.

He can be contacted at thun@asb.edu.my.

If you are interested to know more about our exciting Executive Education program click here.

I am asked many, many times, as a professor and public speaker, what skills do I think people need today to develop the most. Do we all need to learn AI, coding, bitcoins, finance? Or do we need to work on communication, negotiation, managing people, etc.

At ASB we think believe that “Enough with ‘Soft’ and ‘Hard’ Skills—Let’s Get Smart and Sharp Instead” and we challenge the traditional terminology of “soft and hard” skills and replaced it instead with “smart” and “sharp” skills, along with a pedagogical change to reflect the linguistic change. I think of “smart” skills as the skills one needs to successfully navigate through life. At ASB, smart skills are those that require our students to respond to situations and challenges with intelligence and diplomacy.

They include, among others, creative and critical thinking, emotional maturity and empathy, cognitive readiness, social intelligence, adaptability, ethical and cultural awareness, self-awareness, personal discipline, a global mindset, collaboration and team work (from brainstorming to execution), knowing when to listen, validation, humility, entrepreneurial mindset, followership, humility, flexibility, willingness to learn, innovation, open mindedness, creativity, dependability, managing up, down and across, networking, etc.

The “sharp” skills comprise technical capabilities such as data analytics, optimization, risk assessment, system dynamics, and machine learning, for example. And my goal as an academic leader to teach these skills, along with my colleagues, in practice as well as in theory. So without further ado, here are the “smart” skills that I look for most when I hire or work with someone, and the skills that I want my #ASB students to develop along with their “sharp” skills.

  1. Emotional Maturity = “refers to your ability to understand, and manage your emotions”. You have heard me say over and over again in my talks or masterclasses: “The Job is Easy, The People are Not” and the reason why is partially because of our abilities to manage our emotions both in a professional and personal setting.
  1. Validation = “the ability to provide recognition or affirmation that a person (including yourself) or their feelings or opinions are valid or worthwhile”. Oprah said that we all need it (validation) and I learnt that the hard way! Also, goes back to “The Job is Easy”…
  1. Knowing When to Listen = “the ability to focus completely on the person/s speaking, understand their message, comprehend the information and respond thoughtfully.” I ask my students to listen more, to focus on the problem before they focus on the solution. And I know I need to work on this too! Again, the Job is Easy, if the People are too!
  1. Followership = “the capacity or willingness to follow a leader.” My mental model of following a leader comes from Star Trek Next Generation (how else) between Captain Picard and “Number One” Will Riker. Riker disagrees with Picard but only privately, and in public, he is his Captain biggest supporter.
  1. Managing Up =
    Classic Definition – Managing up is about developing a good working relationship with a superior.
    Modern Definition – Managing up is solving problems that your stakeholders need solved.Are you a difficult boss? I am, because I expect everything I asked for and some change. And that doesn’t make me popular with many. But it turns out that for most of us, if you know how to solve the problems of your stakeholders in the way they want it solve (and some change), you will become hard to replace. I give a masterclass on Managing up in executive education at ASB. Ask me more…
  1. Humility =  “to recognize your value and others value while looking up. It is to see there is far greater than ourself into who we can become, who others can become, and how much more we can do and be.” Our ASB President, MIT Sloan Prof. Charlie Fine says: the world is full of smart and arrogant people out there. I wanna work with the smart and humbled ones. The truth is that the ability to be humble is a practice. I learnt that “the more i know the less i know” and also, that arrogance and ignorance are best of friends. So you wanna become more humble? Learn more so you realize how little you know!
  1. Adaptability = “an ability or willingness to change in order to suit different conditions”. One of my favorite fields of knowledge is evolution and like Darwin said, the only species who survive are the fast and adaptable ones (have you seen any dinosaurs lately?) Same with the humans. Professionals with strong adaptability skills will make it. The rest are probably going to spend their time in Jurassic Park 😉
  1. Cultural and Ethical Literacy = “the competence and knowledge of understanding of the differences between yourself and people from other countries/backgrounds/race/religion, especially differences in attitudes and values” and “the willingness and ability to identify moral and ethical contexts and dilemmas“. And because of the global expansion of the workforce, there was never a better time in our history when these 2 critical smart skills were more needed.
  1. Strategic and Critical Thinking = “the process of conceptualizing applying, analyzing, synthesizing, and evaluating information to reach a goal, and have a plan for execution”. Every time I ask an employer about what skill they value the most, strategic and critical thinking come on top. Obviously, right? This smart skill empowers you to solve complex problems in the absence of a blueprint and SOPs.
  2. Cognitive Readiness = “the mental preparation (including skills, knowledge, abilities, motivations, and personal dispositions) that a person needs to establish and sustain competent performance in our complex and unpredictable environment”. This is a hard one and that’s why I left it for the end… Leaders and their teams, have to be constantly prepared to face ongoing dynamics, ill-defined, and unpredictable challenges in the digital, highly disruptive and VUCA-driven business environment. I also run a Master class on this if you wanna know more.

So now the question is how you manage to build up all these skills? There is a complicated answer (which probably requires a book) but for me, the simple answer is constant Action Learning, Learning in Action and Reflection. Just what we do here at ASB!

If you are interested to know more about our Action Learning click here.

Humankind has made huge strides in technology. Big data and data analytics, artificial intelligence, machine learning and deep learning are being used in various daily applications and industries. But when it comes to retirement schemes, we appear to be stuck in the past.

The leading solution that private retirement planners have come up with is a spectrum of well-diversified risk/return investment portfolios drawn from 1950s financial technology, or at best a series of target date funds, where risk-taking follows a predefined ‘glidepath’. A recent innovation has been the enabling of the same solutions at lower cost using technology, or robo advisers. Surely we can do better.

Read the full article here.
This article was originally published on Asia Asset Management

Prof. Ong Shien Jin is a Professor of Practice at the Asia School of Business (ASB). His research interests are in Finance & Analytics. Shien Jin’s background spans finance, tech & academia. He started his career as a Quantitative Strategist at Goldman Sachs Asset Management Fixed Income, specializing in mortgage-backed securities.

After Goldman Sachs, he joined the tech industry as Special Assistant to the CEO at JobStreet.com, the #1 online job portal in South-East Asia. Prior to ASB, he was a Visiting Senior Research Fellow at the National University of Singapore (NUS). Shien Jin holds a PhD in Computer Science from Harvard University and a Bachelor of Science in Mathematics from MIT.

He can be contacted at shienjin.ong@asb.edu.my.

“If you’ve been doing the same thing for more than 2 years, then you might as well be in a coma”

Dr David Rock, the founder of the Neuroleadership Institute, an integrated field that merges hard science with soft skills of leadership, stated during the American Society for Training and Development (Now known as ATD) one summer in Florida. What did he mean? Let me tell you a story about an intriguing experiment out of the University of Southern California, which was published in the journal Personality and Social Psychology Bulletin in 2011.

The experiment was about popcorn and the people who eat them. That’s right, popcorn – like the ones you find at movie theatres. The researchers focused on two groups of moviegoers; ones who regularly enjoyed these delicious treats and the others who rarely ate them. Let us call these popcorn personalities 1) the “Yes, please” and 2) the “No, thanks”.

The groups were tagged and then offered some popcorn during their movie going experience. In the bucket, researchers put in two types of popcorn. One was freshly popped and another was about a week old. The mix was handed to both groups. And the organizers then sat back and waited to see what would happen.

What do you think?

From my own survey with participants in the room, most people think that the “Yes, please” group would only go for the fresh popcorn. After all, these were ‘professional’ popcorn eaters so they should know what they were doing, right? Perhaps it was the same logic that an employee who has been doing a job for many years should know it more than anyone else?

That’s what I had thought, too. The results of this experiment, however, showed otherwise. It turned out that people who were ‘smart’ about selecting fresh popcorn were instead the “No, thanks” group. The “Yes, please” were indifferent of new vs. stale popcorn. They would eat them both! Truly intriguing was when experimenters asked the “Yes, please” group to repeat the task; only this time its members were asked to use their non-dominant hand.

That’s right, to use only their non-dominant hand. If they were right-handed, then they had to use their left hand to pick up the popcorn. If they were left-handed, like me, then it was the right hand. Amazingly the results flipped. The “Yes, please” group now exhibited selective behavior for fresh popcorn just like the “No, thanks” group. Forcing them to do what they were not accustomed appeared to restore awareness. Their brain can now distinguish between what is good and what is bad.

What to make of these results?

Leadership Insights

The brain operates in ‘economy mode’. In simple terms, our brain is frugal. The brain tries to find the most energy-efficient path to get its desired output. When the brain learns something for the first time, it uses a lot of energy. Basically, it needs to think. However, doing the same repetitive work for a while the brain discovers that it can save a lot of energy by merely carrying out the act. This is what we know as habits, like locking your car, driving home, or taking a shower in the morning.

The myth about experience. Given the implication, is it always true that people with a lot of experience know the most? Our understanding of the brain might suggest otherwise. The experienced popcorn eaters relied on their habit more than their forebrain. They were not ‘thinking’ about eating the popcorn. It was not until they were asked to use their non-dominant hand that their brain was subsequently forced into an active mode. So, don’t just rely on the veterans in the team; bring in a fresh perspective – someone who asks ‘stupid questions’. Listen to them and see if they saw something the experienced may have missed.

Quint Studer, author of Hardwiring Excellence: Purpose, Worthwhile Work, Making a Difference, wrote about a practice at his hospitals called The-First-30-Days. After a month into the job, new employees are gathered to share what they have seen that seems ‘strange’. It could be as complex as an MRI preparation procedure he/she used at the prior workplace. Or as simple as “I was wondering why the microwave here took so long to heat up our food”. The rule is everyone else can only listen. No explanations or rebuttal are allowed.

Quint explained that most organizations assume it is natural for seniors to mentor juniors. But valuable insights could be drawn from reversing the process as well – getting your houseguests to see what your home has been missing. By the way, the microwave catch was an actual example. The hospital improved their staffs’ return-to-work time after it placed a more powerful microwave in the pantry. This is an example of not becoming ‘popcorned’.

Lead you brain. If we do something repetitive for a while (like writing that marketing plan using the same excel template for 2-3 years consecutively), our brain switches off and operates in ‘economy’ mode – no thinking required. What the experiment also taught us, fortunately, was that we can do something about it. Don’t let your brain settle into repeating patterns. Come to work using different routes, disrupt the morning routines, allowing ideas you disagree with to take shape, read different types of books, volunteer for unconventional tasks, rearrange the office, start with a fresh template – the possibilities are endless.

Intriguing, isn’t it? This is yet another reason why organizations should actively develop leaders. Ask your people to experiment with their sense of urgency for change. Force their forebrain to look for ‘cracks in the iceberg’, as the leadership guru, Professor John P. Kotter would say. A Litmus Test: Is the first thing your people think of when getting to the office in the morning: “where to have lunch today?” If the answer is closer to ‘yes’, then there might be a red flag that everything else between breakfast and lunch has become habits.

Dr Rock concluded his session with this gem.

“Do your people actually have 20 years of experience, or simply a 2-year experience repeated ten times?”

Dr Thun Thamrongnawasawat (Tan) is one of the foremost experts on dissecting complex management and business models and cascading them for easy implementation by companies across different industries. His innovative B.A.S.E. model has inspired numerous organizations to transform. He’s the author of the Brain-BASEd Leadership book series (2013-2016), a bestselling The Leadership Journey (2018) and a regular newspaper columnist. In 2015, Dr Thun was the recipient of World HRD Congress’s “Global Coaching Leadership Award” and named “Consultant of the Year” by the Ministry of Industry, Thailand.

He can be contacted at thun@asb.edu.my.

If you are interested to know more about our exciting Executive Education program click here.

Want to energize your team? Light a fire under them. Literally. 

“We must be Motorola; or get out.” Lee Kun Hee— chairman of Samsung Group— made the above statement in early 1990s. It was his vision for the company’s mobile phone division; made amid prominent rivals such as Nokia, Ericsson and, evidently, Motorola. Samsung had an apathetic global market share of less than 10%. In the prior years, Samsung found its mobile device business struggling with products that couldn’t compete.

While Nokia was known for its product durability, Samsung’s offerings were known for their fragility and poor quality. Customers who had used the earlier Samsung models might recall what I am talking about. Participants in my session often joked that they could drop the Nokia 3310 on the floor – having it split into pieces – and the call would remain connected. But a slip of the hand, even onto a tabletop, and they might as well say goodbye to the Samsung phone.

The straw that broke the camel’s back came when Samsung rewarded brand new phones to their employees as a New Year’s present for their hard work. Ironically, a significant number of those phones failed from the moment they came out of the box. Finally fed up, Mr. Lee decided he had to do something about the situation. “What’s that smell?” Hyun, an employee in the phone assembly line, mentioned without looking up to his boss who was passing by.

“What smell? Ah, the smell of something burning? That’s the fire in front of the factory.” “Who’s burning stuff in front of our factory? Does security know?” asked Hyun, his hands were still busy with phones on the conveyor belt before him. “The chairman.” his supervisor replied equally plainly. “The chairman of what?” Hyun looked up. “Of our company; Mr. Lee himself. He’s burning phones” This time Hyun stopped assembling. “What phones?” The supervisor diverted his eyes.

The shame barely disguised in his voice “The phones you’re assembling, Mr. Hyun.” In 1995, Chairman Lee Kun Hee called for a meeting with supervisor-level employees at a factory in Gumi, South Korea. Laid unceremoniously on the concrete ground out front are almost two thousand mobile phones. With everyone assembled, Lee promptly soaked the phones with kerosene and lit them on fire, turning the brand-new products into ashes in minutes.

“We must be Motorola; or get out.” The message was loud and clear. Either get better, or let’s go home. A headband with the words ‘Quality Pride’ was given to all in attendance. “I meant what I said as our vision. We are capable, and we can make our rivals know the true spirit of Samsung.

I want you all to remember this day; if every ounce of energy in your heart and body is dedicated to creating quality products, this sort of incident will not happen again.” Chairman Lee made his statement and was the first to put on the headband with a look of determination “Change everything but your wife and children,” were Lee’s closing words in that eventful morning.

Leadership insights:

Sometimes reasons are not the answer. Many organizations fell into the pitfall of being too dependent on dry logic of the forebrain. When reasons cannot change a person, why not try the emotion game instead? How Chairman Lee played with fire is one of the many examples of a leader who successfully brought about change. This story became legendary as Samsung institutionalized the fighting spirits in their culture.

In 2005 when I was working with Nokia, we used to laugh at the Koreans for challenging the giant. Samsung took less than five years since to become the number one phone manufacturer in all categories. And Nokia took the same time to become, well… Habits are not easily changed. Those two thousand phones were not the only lot Chairman Lee had to burn to make his point. Products that did not meet his standards of quality continued to be obliterated in the same fashion.

Analysts estimated that Samsung burned approximately 150,000 phones which amounted to 188 million U.S. dollars. This is an important part of the lesson: Do not think that even a strong reminder will solve the problem in one shot. Habits are formed from constant stimulations that turn desired behavior into main pathway in the brain. So, tell them, tell them again, and tell them that you told them.

Utilize all inputs. The brain receives inputs from various channels of our body. When speaking of communication, we normally think of what employees see and hear. But the brain processes many other information sources that can also be exploited. Fire gives birth to smoke that stimulate the nose; the skin can feel the heat; emotions can be stirred by the visual of destruction.

On a more positive side, leaders can also use other methods of communications to stimulate the brain; methods such as music broadcasted through speakers, nice aroma in the meeting room, the temperature of the environment, etc. Even fire can render positive effects. My sister, who is the Chief Marketing Officer of a listed company in Thailand, quip that “Whatever happened to the Galaxy Note 7 (banned on planes in 2016 for catching fire from overheating), Samsung may have escaped with the best of the bargain.

They got every pilot on every plane in the world to mention their brand – for free!”. It was a joke, but thought-provoking nonetheless. In fact, a mere three months later the Federal Aviation Administration (FAA) announced that mandatory pre-boarding notifications about the Note 7 were no longer needed ‘due to the high degree of public awareness’. Samsung was not the only company where leaders played with fire. Gordon Bethune, CEO of Continental Airlines, also made his point by burning things.

He wanted to build a culture of customer-centric service, but found the company’s regulation-plagued culture to be a roadblock. Situation after situation was reported where corporate regulations prevented good service. Their employee’s manuals were getting in the way of necessary changes. So, one day Bethune called his employees to bring their operating policies and procedures. And he lit them on fire.

“If our customer missed a flight for some unforeseeable reason, standing before us with a growling stomach and fatigued from rushing between gates; I don’t want to heartlessly tell them ‘Sorry. But we cannot help you. It’s our company policy’.” said the CEO as the bonfire was dying. Sheepish smiles were scattering in the gathered crowd. “Today marks the beginning of a new culture at Continental – a culture of trust…”

The CEO pointed at the pile of ashes scattering by the wind. “I am confident and believe in your ability to best judge the situation. If you think that giving our customer a meal coupon – or even a ticket for a free flight— is the right thing to do, then go ahead and do it. The company will no longer restrict your leadership potential with these rules.” This time applause broke out with cheering and laughter. And Continental Airlines quickly rose “from worst to first” in customer service.

Want to energize your team? How might you play with fire?

Dr Thun Thamrongnawasawat (Tan) is one of the foremost experts on dissecting complex management and business models and cascading them for easy implementation by companies across different industries. His innovative B.A.S.E. model has inspired numerous organizations to transform. He’s the author of the Brain-BASEd Leadership book series (2013-2016), a bestselling The Leadership Journey (2018) and a regular newspaper columnist. In 2015, Dr Thun was the recipient of World HRD Congress’s “Global Coaching Leadership Award” and named “Consultant of the Year” by the Ministry of Industry, Thailand.

He can be contacted at thun@asb.edu.my.

If you are interested to know more about our exciting Executive Education program click here.

“Ooops. I spoke too soon. Didn’t I ?” 

“Yes you did. And I was about to add my thoughts to the list but when I heard you say nitpick, I changed my mind. Why do you like to say things like that?”

“I didn’t mean to. I realised I should be quiet the moment I started speaking but it was too late. I am sorry”.

This was an actual exchange between a member of a company’s Management Committee and his CEO at the tail end of a two-day management retreat that my team and I facilitated recently. If the exchange above seems rather honest and sincere let me assure you that it was only possible after a rather difficult and, at times, painful two-day session in getting people to learn how to have really meaningful and honest conversations.

We were asked by the company CEO to help facilitate a session with all his team members who make up the management committee of a multinational oil and gas supporting company. The issue stems from his observation that “people do not speak up enough during meetings. Even when they do its always the same people. All the rest are happy to listen and provide the leadership and teamwork in their own areas but I need them to speak up where and when it matters – in the board room.”

In our conversations with all the members of the team when we were designing the session, we discovered that almost everyone felt that their views did not really matter to the CEO. Most of them felt that to him asking for views from others is just a process that needed to be done but at the end of the day it was always his views and his views only that really mattered. Another conversation blocker was that they were also afraid of incurring the anger of the boss.

“All of us have had a taste of that, trust me it is not something we could easily forget”. We asked the CEO the same questions. He was asked to describe the experience of driving difficult discussions with his team and he too expressed almost the same sentiments as the rest of them!! He was worried that he may not have enough convincing skills to sell his ideas to the team so he always resorted to using his veto power to make decisions.

He was hiding behind his position for fear of his inability to convince the team of the merits of a certain plan. The truth is most people are not trained to have really meaningful conversations. Many people think they are but really meaningful conversations are the ones that make people become more productive or at least, more acceptable and open to consider other perspectives of a given situation. This applies both at work and on the more personal fronts of our lives.

When participants were asked to describe some conversations that they remember well most of them also include emotions in describing those conversations. In reality we do not remember what we thought but more on how we felt about those conversations. Emotions play a very important role in conversations. Always start with the heart someone says. And she is right. Always start with the heart – ours and theirs.

That is why according to speech specialists, more than 90% of interpersonal conflicts happen because of the wrong tone used in conversations. It is not what you say but how you say which is more important. Get clarity on our motive of having the conversation and stay true to the motive and the right tone will follow.

We were having what was supposed to be a short team discussion after a long day of facilitating an open enrolment session in Shanghai. It started well enough with everybody looking forward to organising another regional level conference when things started to get testy. I could see things were taking a turn in the wrong direction very quickly when on the pretext of grabbing some coffee I asked Eric what was it that made him turn rabid.

“Didn’t you hear what he said to me about the timeline being extended?” I replied that to me he was not saying anything that I myself wouldn’t say. “It’s not so much what he said but how he said it that got me”. That was all it took to derail what was up to that point a really productive discussion. That is why according to speech specialists, more than 90% of interpersonal conflicts happen because of the wrong tone used in conversations.

It is not what you say but how you say which is more important. Get clarity on our motive of having the conversation and stay true to the motive and the right tone will follow. And that brings me to the next conversation derailer. Eric was upset at our colleague at the way he spoke. He was so upset that he could not bring himself to get back on track and resume the discussion. What happened to Eric is what I call being derailed.

It became a problem when he could not bring himself back on track. And it got worse when he went into “movie making”. We are all addicted to being right. Being right makes us feel good. Being right justifies our existence. Being right makes us feel strong. Being right energises us. So to justify our “rightness” we tell ourselves stories to justify our beliefs about a person.

Based on what little we know about a particular person who makes us angry we use that data to string together stories to justify our positions. In short, we make movies to make us feel better. To make us feel justified at not being on the same side of the table as him. Guess what? Movie making is not limited to only Eric. We all are good movie makers. We could put Hollywood to shame with our creativity.

The real challenge in having critical conversations is to make movies together. Mutual conversations that create a common reality. Let’s get back to my earlier example of the CEO and his team. A big reason why the CEO was not getting his team to speak up was also mainly because they did not feel safe enough to speak. In short, the leader has failed to create a safe environment where people would not feel that they are constantly being judged at what they say.

And the real fear of being inundated with a barrage of fury that would take days to be overcome would be another factor that continued to plague them. The most disturbing fact about this situation is that the CEO has no clue that he is impacting his people that way. This is a classic situation of a person with good intentions but with bad impact on the team. The ability to drive conversations is being able to align intentions with impact.

And as said earlier, always start with the heart. This is when we tell ourselves again and again throughout the conversation what is it that we really want to achieve from the conversation. This will keep the tone and the words in line with our good intentions. At the two day session we created a safe method of sharing feedback between the team members. Feedback was given anonymously and freely to everyone in the team.

As expected, everyone recognised everyone else’s commitment to the team. Everyone was convinced about the dedication and sincerity of the members to see the team reach its goals. As said earlier, good intentions can only get you so far. Without the skills to manage critical conversations effectively, everyone will be busy making their own private little movies, leaving little time left for the real epic to be made together. Granted, not all conversations are critical. But for those that are, leaders must be well prepared and skilled to drive conversations that can be catalysts and not inhibitors, to high performance.

In our Managing Critical Conversations program, participants will learn why some leaders can inspire people with only two minutes while some struggle to be credible town hall after town hall meetings. Participants will learn practical, easy to implement tested framework and best practices that can bring them success in driving critical conversations.

Muhammad Sabri Rawi’s skills as a leadership development expert spans almost two decades. Sabri’s forte includes Leadership & Learning industry design, development & delivery of leadership training courses. He has distinguished himself as a Mastercoach from years of honing his skills in leadership training in multiple industries which include pharmaceutical, manufacturing, plantation, automotive, oil & gas, FMCG, GLC and the public sector.

He can be contacted at sabri@asb.edu.my.

If you are interested to know more about our exciting Executive Education program click here.

“I won’t allow it!” Kurt Herwald, a 38-year old former weightlifter CEO of Stevens Aviation said emphatically.

“That is our slogan; you can’t just take it. Either call off your campaign or give us proper compensation. Otherwise, we’ll see you in court!” 

In 1992, Southwest Airlines ran into dispute with a small aviation service operation out of South Carolina over the use of a marketing tagline – Just Plane Smart. The Texan company has been ranked amongst the world’s Most Admired Company, owning to its exhilarating work culture and unmatched profits over its peers. While the above quotes of Herwald could have been true in a let’s-sue-everybody culture of Corporate America at the time, the CEO actually said he “didn’t believe in litigation. And besides, what’s the fun in that?”

So, when Stevens Aviation provided undisputable proofs that it had been using the slogan for years, instead of fleeing or fighting, Herb Kelleher – the colorful Chairman and CEO of Southwest— side stepped this landmark lawsuit with problem-solving skill of a first grader. “Let’s settle this like a man, shall we? I challenge you to an arm-wrestling match; winner takes the slogan” It was a litigation-free solution that the 61-year old leader accepted with spirit of a warrior.

The two companies then jointly hosted the ‘Malice in Dallas’ event at a famous pro-wrestling ring. Word got out and soon every employee on both sides knew about the big bet. They, along with faithful customers, were given a day off work to come and cheer for their respective CEO. It was a 4,500 crowd of ‘Company-Stopping Match’ on par with a Mayweather vs. Pacquiao bout.

Before the big day, Kelleher released footage of his secret training to demoralize the opponent. He did bicep curls with 2-liter Wild Turkey whiskey bottles, squatted with support from beautiful ladies, and performed sit-ups with cigarette in his mouth. Even Southwest employees shook their head and went to place their bet on Stevens’ Herwald, seeking to earn easy money.

This arm-wrestling match is one case study I often bring up when in session with executives. It is a prime example that shows how a culture is built. What Southwest wanted to have was a ‘Warrior Spirit’ – a place of work where people get things done and have fun doing it. There are no right or wrong solutions, and all ideas are welcome. Be intuitive. And what better way to demonstrate that culture than by having the CEOs solving a gigantic business dispute in an arm-wrestling dare?

Leadership Insights:
  1. Use the mirror neurons. The brain is built to imitate. Mirror neurons are a set of cells that fire when we see someone else performing an action. Dr. Giacomo Rizzolatti, an Italian Neurophysiologist and professor at the University of Parma in Italy, and his team discovered this unique property of the brain while doing studies with macaque monkeys. When the monkeys saw researchers picked up a banana, their neuronal network associated with the same action – picking up a banana – also fired. So, a brain-friendly way to get your people to do what you expect of them is simply to do those actions yourself.
  2. Do it genuinely. An interesting observation of mirror neurons is that they only respond to genuine acts. We only yawn when the person in front of us genuinely yawn, but we do not imitate if it is a ‘fake’ yawn. Researchers tested this by having participants observed a same action with different intents. 1) A person lifting the mug and drinking tea or 2) A person lifting the mug an ‘pretends’ to drink tea. Mirror neurons are only activated in the former case. So, a lesson for leaders is to be true to who you are. Do not manipulate people – the brain, and its years of evolution, can see right through it!
  3. Character counts. Walking the talk only works if you do it often and do it genuinely. This means to create the desired culture you must hire the right people. In fact, a study published in hbr.org in 2015 showed that companies of leaders rated high on character generated 5x the growth of companies with leaders rated low on character. So, pay less attention to what’s on your people’s resume and more on what’s in their heart. Change your interviewing question from “What can you do?” to “What makes you happy, sad, or angry?”. The former tests their competencies while the latter tests their character and values.

One highly sought after job prospect of Southwest recounted his interview experience with Herb Kelleher. “I came into his room and Herb was sitting at his desk. He had removed his shoes and his feet were propped up on the table. I saw these big holes in his socks and I decided this was where I wanted to work”. It was through the CEO being true to who he was that helped build the warrior culture that became an insurmountable competitive advantage for Southwest.

As for the result of their arm-wrestling competition, Kurt Herwald, being some 30 years younger, soundly beat ‘Smoking Herb’ the CEO of Southwest Airlines. The beaten executive had to donate a total of 15,000 USD to charity while the winner was to have gained the rights of the slogan. But amidst the excitement and firing mirror neurons of the crowd, something else happened.

“Listen up everyone!” Declared Herwald, smiling ear to ear. “I have much respect for Mr. Kelleher for honoring our small airline with this event. I think we are both winners today. As such, we’ve decided to let Southwest continue the use of our slogan. Let’s grow together!” The announcement brought endless rounds of cheers from employees of both companies, and raised the already electrifying atmosphere to another level.

For those who want to experience this landmark day on 20 March 1992, you may find a YouTube link of the event reported by NBC https://www.youtube.com/watch?v=ewVUKp2r4aw.

Needless to say that this was a graceful end to a dispute. It saved massive costs for both companies on litigation fees and the time they would have spent in court. But perhaps the most invaluable gain was the hearts of employees captivated at the event. They now realized what it meant to be living a true culture of Southwest Airlines’ ‘Warrior Spirit’.

Just Plane Smart, indeed.

Dr Thun Thamrongnawasawat (Tan) is one of the foremost experts on dissecting complex management and business models and cascading them for easy implementation by companies across different industries. His innovative B.A.S.E. model has inspired numerous organizations to transform. He’s the author of the Brain-BASEd Leadership book series (2013-2016), a bestselling The Leadership Journey (2018) and a regular newspaper columnist. In 2015, Dr Thun was the recipient of World HRD Congress’s “Global Coaching Leadership Award” and named “Consultant of the Year” by the Ministry of Industry, Thailand.

He can be contacted at thun@asb.edu.my.

If you are interested to know more about our exciting Executive Education program click here.

If you love something; set it free
If it comes back, then it’s yours forever
If it doesn’t, then it was never yours in the first place

Do you agree with the above saying? Is true love a function of proximity? Whether or not this is true for you, brain science may suggest otherwise! Let me explain. If you’re in my generation, you probably remember when we used to buy ‘cassette tapes’ for music. There were the A and the B sides that required physical flipping of the unit to access either one. Bringing back memories?

Back then, you had to buy the whole album of 10-12 songs even though you only cared for the few ‘hit’ songs on Side A. While we did have the option of rewinding or fast-forwarding (Gen Y-ers are probably wondering what those actions are), most people usually let the tape roll through the rest of the songs before flipping sides. Then before we realized, those mundane songs got catchy and we caught ourselves humming their tunes while driving.

This is the power of propinquity.

In the book titled Influencer: The New Science of Leading Change by Joseph Grenny and Kerry Patterson, the term ‘Propinquity’ was used to describe these phenomena. The term itself means ‘the state of being close to someone or something’. In this context, propinquity represents that fact that our brain changes proportionally to distance: The closer the distance of an influencer the more the brain is likely to change, and vice versa.

In this regard, propinquity says that if you are close to someone then you are likely to love that person. Conversely, if you ‘set it free’ then you have a diminishing chance that it will ever come back to you. And brain-based leaders can learn to use this to our benefit. For those who want to lose weight, one propinquity technique is to ‘change the size of the plate’. In 2006, Dr. Brian Wansink from Cornell University conducted an experiment where consumers were served using a special bowl.

The custom-built container allowed soup to be refilled through its bottom without the person knowing: “I want to know whether people would stop eating when they’ve had enough, or when the bowl is empty”, said the researcher. Can you guess what the result was? It turned out that the people who ate from these special bowls consumed 73% more than the group served with the regular ones.

The patrons did not even realise they were eating that much; “It didn’t get any lesser no matter how much I ate, so I kept eating.” The study concluded that our feeling of being ‘full’ is measured by the amount of food we see before us rather than the volume of our stomach. We eat less when the food is in a small container, and we eat more in a large one.

Another example of propinquity; one restaurant faced a problem of staff ‘under-packing’ food, making it necessary to allocate extra resources to fix the mistakes. The manager simply drew a small line inside the container with words ‘add to this point’. And just like that, the problem disappeared. Simple, yet effective.

At work, propinquity implies that if you want your team to do something, you should present the desired behavior in the simplest, closest, and clearest manner possible. For example, instead of describing our corporate culture as virtue or teamwork – most people don’t understand what these generic terms mean – Iclif puts on its wall ‘Assume Positive Intent’. Simple, yet effective.

Leadership Insights:
  1. Use propinquity to your advantage. Try using the strategy of closeness on your people. Continue to observe the unfavorable behaviors and see if you have already exhausted all options to help the brain with proximity. I’ve worked with many organizations that desire ‘effective meetings’ in their culture but I couldn’t find a clock in any of their meeting rooms. How could the brain be punctual when it had no access to any visual cue of time?
  2. Build a culture of closeness. As a leader, you should ask yourself whether you are leading with ‘true love’ or with ‘closeness’. 1) Leading with true love means you look after the subordinates— albeit with love and care – from afar. You believe that everyone is a good person who puts full effort into the job even if they don’t see your face around. Or, 2) leading with closeness means you are always there taking care of things. Yours is the face the team sees whenever there’s a problem, or an opportunity. When they have an idea to pitch, you are there ready to listen while it’s still fresh. You check on even problems that they might be having at home. You gave no distant remarks like “As long as it doesn’t affect your work”. I once worked for a leader who I could always drop by for a chat. Even when I talked about things unrelated to the organization, he was happy to listen and gave attentive advice. Whatever he promised to do, he did. Then, change happened and I had to work with a boss that operated on the ‘trust’ system. This meant that we only talked occasionally as he trusted I could handle the job. The empowerment sounded nice but somehow I found the distance negatively impacted our relationship. To my heart, it just wasn’t the same.
  3. Create propinquity with a shared vision. Some executives may say, with good reasons, that “I couldn’t possibly have the time to get close to all the people in my organization,” or “That’s not my style”. In such case, another way to utilize propinquity is to build closeness via having a shared vision. Have you noticed how sports can mystically turn two complete strangers into friends? “Which team do you root for, coach?” is a question I often get when the topic of football comes up during lunch breaks. I found that when the tablemates all cheer for the same club, our intimacy skyrocketed and we bonded in the blink of an eye. That’s what a ‘mutual vision’ can do for leaders and their team.

Hence for the brain and its propinquity effect, the saying becomes.

If you love something; set it near
If it never leaves, then it’s yours forever
If it threatens to leave, do whatever you can to get close

Dr Thun Thamrongnawasawat (Tan) is one of the foremost experts on dissecting complex management and business models and cascading them for easy implementation by companies across different industries. His innovative B.A.S.E. model has inspired numerous organizations to transform. He’s the author of the Brain-BASEd Leadership book series (2013-2016), a bestselling The Leadership Journey (2018) and a regular newspaper columnist. In 2015, Dr Thun was the recipient of World HRD Congress’s “Global Coaching Leadership Award” and named “Consultant of the Year” by the Ministry of Industry, Thailand.

He can be contacted at thun@asb.edu.my.

If you are interested to know more about our exciting Executive Education program click here.