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Executive Education

Category: Thought Leadership

“Dr Tan, I’m really fascinated by the Freedom Within A Framework idea.” Olivia, a manager who recently attended our Iclif program shared with me. We were having a follow-up reflection conversation.

“But the problem is, I don’t know how to put it into practice.” She continued: “I manage 15 people. I can’t just give everyone freedom to roam – the risk is just too high.”

“Would you like me to show you something to see if it helps?” I asked. The manager nodded enthusiastically. I gave Olivia one yellow Post-It note and asked her to think of a subordinate from her team. I then asked her to write down her best guess of the person’s Values & Purpose. The concept of Leadership Energy was discussed at length during the program she attended, so Olivia knew exactly what I meant.

It took her about 10 minutes to come up with 1) Harmony 2) Integrity 3) Security 4) Family and 5) Accuracy, as the Values. For Purpose, she wrote, ‘To be a good father and a responsible worker’.

On another piece of Post-It note – a blue one – I asked Olivia to think of the Values and Purpose she would like to see in her team. This time she quickly wrote 1) Integrity 2) Results 3) Excellence 4) Customer-Centric and 5) Teamwork. Her team’s purpose was ‘To become the number one branch in the region’.

“Good. Now, please overlay the two pieces of the notes,” I told her. “You can decide how much they overlap – ranging from a small area to a complete coverage.” Olivia looked at the information on the two notes. She decided they were about 40% overlapped; particularly around Integrity and Harmony/Teamwork. “Last question, what is the degree of freedom have you been giving him?” She thought about it for a minute then said probably about an 8 out of 10.

“I’m not a micromanager. I like to give my people freedom,” Olivia smiled sheepishly. I drew a diagram like the picture below in front of her. One axis is labeled Alignment of Values/Purpose and the other is labeled Freedom. I explained briefly what each zone means in the context of Freedom Within A Framework.

We placed on the chart the coordinate this manager has assigned her subordinate: 4 for alignment of Values and Purpose and 8 for Freedom. “And there is your problem,” I told her. “You have been giving him too much freedom.” The coordinate placed us in Zone 4: Too much Freedom. This zone describes a mismatch between Low Alignment of V&P and High degree of Freedom.

In laymen’s terms, this means the person has not earned the right to be completely trusted by his manager. In Olivia’s case, this is because the subordinate has not shown – at least to the boss’s eyes— his sharing of the team’s Values for Results, Excellence, and Customer-Centric.

If given a lot of freedom, he could make decisions that violate the team’s Values. For example, he could choose to attend his daughter’s recital and not submitting his work on time. “So, I can’t give him the freedom?” She frowned. “Well, no and yes.” I smiled and shared with her the following points.

Alignment of V&P is proportional to Freedom. The more your people show that they will act according to your team’s Values and Purpose, the more you can trust them to do the right thing. Mary Barra, the current CEO of General Motors, said this amidst her difficult decision to recall over 1-million GM cars due to manufacturing defects: “We quickly defined our guiding principles based on our values…

If the company sees you do the right thing, and your people know you are going to do the right thing even when it’s hard. That, to me, is so important for me to trust that we are doing the right thing at all levels, every day.” (Power Moves: Lessons from Davos (2018) by Adam Grant) Therefore, as a leader, you should aim to maximize your team members alignment of V&P. Achieving this starts with 1) to define clearly and communicate what your team’s V&P are; and 2) to observe and understand each of your team members’ V&P.

In Olivia’s case, her team member needs to learn that while it is okay to value Family, he must also respect the other important values of the team, e.g. Results and Customer-Centric, as well. This means that even if he chose to attend a family event, he must also deliver work on time and excellently. Olivia may need to have a conversation and move him to Zone 2, i.e. lower freedom, until she sees the behavioral alignment.

Give freedom to those who have earned it. Shape those who haven’t. Interestingly, many managers I have interacted with say that they have a great team; with members clearly aligned with the team’s V&P. In fact, ‘Alignment to Organisation Culture’ had the highest score in one of Iclif’s 360-degree Leadership Readiness Surveys of a 30,000-employee organization. Yet, these team members are managed with a lot of rules and policies, i.e. no freedom. The combination of a high degree of alignment but a low degree of freedom is described in Zone 5: Not enough freedom, which leads to unnecessary delays, frustrations, and distrust.

In Iclif’s most recent book, Open Source Leadership (2017), the author Rajeev Peshawaria highlights the fact that in today’s business environment, speed is everything and the ability to remain agile and nimble in an ever-changing landscape is critical. Unfortunately, many of today’s organizations still operate as if it were 1990 by not trusting their employees and imposing strict internal rules, policies, processes, and procedures. The result is a bureaucracy which is anything but agile and nimble. Organizations and leaders should relook at how they are managing their people by Freedom Within A Framework and adapt their approach, especially if they have earned it.

Be careful not to give Freedom simply based on performance. V&P alignment and performance may not necessarily go together. Don’t make the mistake that some managers do by simply giving employee freedom based on performance. This may breed a toxic culture because there is a right and wrong way of delivering results. Instead, the organization should always act in accordance with their Values & Purpose, even if it means reprimanding their top business performers.

In his book The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t (2007), a Stanford University professor Robert I. Sutton wrote about a case at a company called The Men’s Warehouse. It fired a selfish and difficult employee even though he was one of the company’s most successful salespeople, and as a result, the total sale volume in the store increased. Another example cited was a fortune 500 company where the CEO fired people who acted against the organizational Values. According to Sutton, the firm benefited from firing these Zone 6: Separation employees and had risen to become one of the top firms in the industry.

What may be counterintuitive is that even those who may be perceived as a ‘low performer’ can also be given freedom if they had proven themselves to act in alignment with the team’s Values & Purpose. In another chapter of Open Source Leadership (2017), Rajeev shares a view that to give everyone in the organization a ‘stretch’ goal is unproductive. The manager should instead have an honest conversation about expectations.

For example, the employees should be allowed to choose the lower end of the bell curve if they agree that a lower performance is fairly linked to lower remuneration. This is a perfect example of Managing by Freedom Within A Framework – the parties are aligned on their values & purpose, leading to working with a high degree of freedom, i.e. Zone 3.

“Wow, thank you Dr Tan. This is very helpful!” Olivia exclaimed. “The chart really helps me to see the relationship between Values & Purpose and Freedom. I can already begin to see where some of my people sit in the different zones, and how I should support them to move towards earned Freedom.”

Here’s a recap of what Olivia and I did together:

  1. Think of 1 member in your team, e.g. reportee, colleague, or even boss
  2. Decode her/his Values & Purpose; write them down on a Post-It note
  3. Pick another Post-It note, write down the team’s/organization’s Values & Purpose
  4. Decide how much the two notes overlap – place them accordingly
  5. Assign the current degree of Freedom and map onto the chart
  6. Examine the corresponding Managing by Freedom Within A Framework Zone
  7. Think about how you can improve / optimize the current situation
  8. Have a discussion with the person to manage the current status while developing the relationship towards Zone 3

What do you think? 

Try Managing by Freedom Within A Framework with your team and do let us know how it works out!

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.

The 21st Century is an era of the brain.

One of the Nobel Prizes given in 2014 was to a group of three scientists—Dr. John O’Keefe, Dr. May-Britt Moser, and Dr. Edvard I. Moser— for their discoveries of cells that constitute a positioning system in the brain. As someone who is fascinated by the brain and leadership, I am always excited about the progress made to understand this amazing organ.

The news also brought back a story of the Prize’s founder, Alfred Nobel. A man who earned his wealth from inventing and manufacturing dynamite, an explosive made of nitroglycerin, which he patented in 1867. In 1888, Alfred’s brother, Ludvig Nobel, passed away. However, word got out that it was Alfred who died. Numerous articles were written to recount his biography instead of his brother’s.

Unsurprisingly, people’s perception of Alfred was extremely negative. He was portrayed as a cruel man, the ‘merchant of death’ – written a French newspaper. One piece even stated that “Alfred garnered his wealth from inventing a tool that rips away people’s lives.” and that the world has become a better place with him gone. The living Nobel, given a unique opportunity to read how he would have been remembered, was devastated. Alfred then resolved to change his legacy to the world.

During one of my coaching sessions, a telecom executive said “I don’t really need anything else in my life. I’ve made it quite far. My kids are all grown up. I only have a couple of years left before retirement. I don’t want to do anything more… It’s tiring.”She said lethargically. “How would you want people to think of you when you’re no longer here?” I asked her.

She took a long pause before replying “I would want them to remember the good things I’ve done. How I had made a difference.” We spent the rest of our sessions on planning what needed to be done to accomplish that goal. Actions were identified to maximize the probability of later generations ‘remembering’ her the way she wanted.

I do not often write about my dad. But this introspection brought back memories of him. When I was 6 years old, my father was appointed the top position for a government official – Permanent Secretary to the Ministry of Agriculture. He was also the youngest one ever at the age of 49. When teased that he seemed ‘rather humdrum’ about the promotion – perhaps because he had prior served as Deputy Minister, a perceived superior position— my father replied.

“I do not think, that a man’s worth is measured by his position. Being a Minister does not mean more honor and respect than any other occupation. There may have been a time that I, coincidentally, served as a Deputy Minister. but never in my mind have I thought of Permanent Secretary as inferior to Deputy Minister. The only important question is how much people remember our good deeds when we’re gone. If you were a Minister but you left people full of curses, where is the honor in that?”

Dr. Thalerng Thamrongnawasawat
Thairath News
20th Jan 1980

Despite our father having been a high-ranking official for several years, our family was never surrounded by wealth. What I and my siblings do take great pride in, however, are the values and purpose our father had left for us. My little sister, now a Chief Marketing Officer at a public company in Thailand, once turned down a high-profile customer because “the executive wanted USD 5,000 as a ‘liaison’ fee”. She then gave a reason that made me so proud of her “I’m his daughter. Dad’s children do not do that.”

Insights for Leaders:

If you aspire to be a great leader, then you need a great purpose. A great purpose does not necessarily mean grand achievements. A great purpose is something that is ‘greater than yourself’. When you lead people with reason, you get only a fraction of their forebrain energy. If you merely entice your people with monetary rewards, then they will leave you the moment someone else offers more.

But when you lead people with great values and purpose, you will unleash their infinite potentials of the hindbrain. You will get their pride, dedication, devotion, and love. This energy is boundless because it bears no reasons. If you are unclear, my advice is to pause and ask yourself “How do I want to be remembered?”

Alfred Nobel decided to dedicate all his wealth into establishing the Nobel Prize. Annual recipients are scientists who have made ‘Outstanding contributions for humanity’. Winners receive research funding of approximately 1 million US dollars – a process that has been ongoing for 116 years. If we were to walk up to a stranger on the streets and ask him who Alfred Nobel was, chances are the answer is a great philanthropist behind the Nobel Prize.

Very few, if any, would remember Alfred as the creator of a lethal weapon. Nobel changed his will in 1895. He died in 1896. Some people… came from the light and left into the light. Others… came from the dark and went back to the dark. Sadly… many came from the light but chose to leave in the dark. People who inspire… came from the dark but rose away to the light. A Buddhist Proverb

How do YOU want to be remembered?

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.

“Another one!” A man in clothes mottled with stains yelled above the congregation. His hand clutched a wrinkled bill as if his life depended on it. 

“One for us too. Please! …” A gaunt lady fought to keep their place in line. Clung tight to her legs was an undersized boy with a baby strapped on his back. The tiny child cried loudly in hunger. The chef, face glistened with beads of sweat, was doing his best to maintain the rapid flow of noodles going into the pot. He appeased his customers “Only one bowl per person! Please back away when you get yours.” “Omachi kudasai” (お待ちください) Please wait a moment.

That was the defining moment for Momofuku Ando – a Taiwanese-born Japanese. His leadership energy was primed. Back in the 1950s when Japan was rebuilding from its defeat after World War II, Momofuku was a middle-aged man deep in bankruptcy after a series of unsuccessful businesses. The scene in that small alley prompted Momofuku to think: There must be a better way to cook noodles than just bowl-by-bowl.

“I need to find a way that allows everyone to cook their own noodles and not be starved in line.” His purpose was born. “Ouch… Not again.” Momofuku’s wife yanked her hands away from the splashing oil. She was cooking yasai tempura, battered fried vegetables, for dinner. Chasing after his goal, Momofuku had been stuck for months tackling a problem: The short ‘shelf life’ of his dried noodles invention.

Traditional Japanese noodles – Ramen – were made fresh with boiling soup. This customary water-based process meant that noodles couldn’t be stored for an extended period. This perishable nature was a huge roadblock for Momofuku. Until he saw his wife cooking that day. “That’s it!” Momofuku proclaimed ecstatically. “We fry the noodles for storage and let them soften back in the water when we want to eat!”

He could barely contain his excitement. Just like that, the era of ‘Instant Noodles’ began. His first creation, ‘Chikin (Chicken) Ramen’, became available on the 25th of August, 1958. Momofuku would eventually achieve tremendous success in Japan with expansion after expansion of his business. However, his dream of ‘putting noodles on every table’ did not end there. “This is a stupid idea.

I am telling you Americans don’t eat noodles. We eat hamburgers and hot dogs with our hands. Look around. Do you see any bowls? Any chopsticks? How are they going to eat your noodles?” Local investors shot down Momofuku’s proposal of bringing his noodles to the US. Where one saw an obstacle; another saw an opportunity. Faced with this new challenge, Momofuku rerouted his energy and came up with a winning solution – instant noodles in a cup.

“No bowls you say? Then I’ll sell them in a cup. We will put a snap-opened fork inside, too. Just fill it with hot water from a kettle. It’s as convenient as a hamburger!” Momofuku countered with yet another innovation. And the rest was history. His invention started the next era of ‘Cup Noodles’. The all-inclusive product first appeared on US shelves in 1971. It would go on to become tremendously successful all over the world. Momofuku was 61 years old. Yet, his dream of ‘putting noodles on every table’ would continue.

Brain Insights
  1. Everyone has energy. The founding principle of leadership energy is that everyone has energy. It is the common currency that fuels all humans. Whether we are rich or poor; young or old; male or female; owner or employee, there exists energy within all of us. The challenge is to recognize that energy and do something useful about ours. Momofuku was just another 40+ years old failing businessman trying to get by in a difficult world. But he saw a present he did not like, and a future he aspired to create. Thus, his leadership energy was born.
  2. Find your purpose. Give your story a meaning. Energy is merely a ‘currency’ much like money in our wallet. We need to learn how to best spend it – to find our purpose. What I love about Momofuku’s story was the clarity of his dream of ‘putting noodles on every table’. I recently interviewed Isabel Medem, a world’s top entrepreneur whose purpose was devoted to ‘putting a toilet in every home’. One Peruvian mother told her “my young son learned to use the toilet by himself because of what you have done”. A purpose is what makes your spending your energy worthwhile.
  3. Reroute the energy. A leadership journey is always uphill so leaders must learn to channel their energy upward. Momofuku ran into yet another problem trying to scale-up his production. Fried and dried noodles would not fit systematically into their cups. He was so nauseous with the stress that one night he saw his house spinning and had to lie down. Amazingly that gave birth to a brilliant solution. Instead of trying to force noodles into cups, why not turn the cups upside down and ‘put cups over noodles’?

Thirty years later, instant cup noodles are available for people in every corner of the world. Had the aging inventor then fulfilled his vision of ‘putting noodles on every table’ Not at all. At the age of 95, Momofuku’s leadership energy was still churning. His next goal was to make instant noodles for astronauts during their duty outside the world. He wanted his noodles to ‘go to space’! July 27th, 2005 on the shuttle Discovery, Momofuku’s dream of ‘Space Noodles’ was realized.

Unlike most other space food, the Nissin noodles were not squeezed out of a bag but rather eaten with chopsticks. “It wouldn’t be noodles if you slurp through a tube.” The near-century-old man beamed like a young boy. He was watching news footage of Japanese astronauts eating noodles while floating around weightlessly above the earth. Two years later, Momofuku Ando left this world in peace – undoubtedly packed with a bagful of new ideas with him.

What’s your leadership energy?

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.

To be an innovator, you must constantly be asking the question: “What doesn’t make sense?”.

Mine was: “Why is innovation such a stigmatized word? Considering how important innovation is to the growth, or survival, of organizations, why do most employees I have met are so turned off by being an innovator?”.

I recently asked a CEO of a medium-sized organization his view on innovation. “On a scale of 1-5, one being the least and five being the most, how would you rate the importance of innovation for your organization?” “Five,” was his reply. This means innovation is very important. “Okay then, on a scale of 1-5, one being never and five being always, how would you rate the frequency of innovation made by your people?” I asked. “Two,” was the answer. This means innovative ideas from his people are a rarity.

Question 1: ONE A SCALE OF 1-5, HOW IMPORTANT IS INNOVATION TO YOUR ORGANISATION
Answer: 55% said the most important. 38% rated it as important. Overall, 88% gave either a four or a five.

Question 2: ON A SCALE OF 1-5, HOW OFTEN DO PEOPLE IN YOUR ORGANISATION INNOVATE?
Answer: 55% said occasionally, 26% rated it as rarely. Overall 81% gave either a three or a two.

I have read a lot of books on innovation – one common thread is they stress the importance of taking risks, failing fast, and experimentation. But most organizations struggle to instill these behaviors, and subsequently innovation initiatives – as evident in both the CEO’s answer and my audience poll. Why the disparity? My working hypothesis is that the culprit is in people’s heads. Innovation has been so hyped as the game-changing task that it scares most ‘normal’ employees away from even attempting it.

A blog by innovationinpractice.com shares a similar view: “Participants in the innovation space tend to perpetuate a mystique about innovation and creativity as though it is a deeply hidden secret that needs to be unleashed.” According to the interviewer, Fortune 100 executives described innovation champions as “altruistic ‘dreamers’ who are out of touch with the business” and that “business people shy away from championing innovation because they believe the stigma of failing at innovation is more career-damaging than failing at other ventures.”

Whether this hypothesis is true, the only way to know is to test it. Iclif has launched a program on innovation called ‘Open Source Innovator’ or ‘OSI’ to address this stigma.

Having experienced the program with employees from various organizations across different countries, here are my key learnings:

1) Innovation is indeed stigmatized: My diverse group of participants initially shared a common skepticism towards innovation – or specifically the idea of THEM being the innovators. Most viewed that innovation is too big a word, too expensive, and too difficult for them to try. In fact, I shared an airport ride with a participant who told me that his company “should have sent people higher up” to the course because he himself was “in no position to innovate anything”.

After the program, we have tamed the innovation monster. Here is a comment made by an attendee from a financial service provider: “The true meaning of Open Source Innovator or (OSI) that we learned is the new kind of innovation, which is driven by ‘empathy and compassion’ to invent, to create, or to do something good for others, for the better society, for the better environment, for the better future, and for the better world. Everyone can do it; even a little single thing surrounding us, as long as we have a strong will power to do it. We all can make it happen. Empathy is a skill.”

2) You don’t have to be a techie to innovate: My client reps told me that the companies they approached tend to send people who are ‘in tech’ to innovation courses. Similarly, candidates who did not consider themselves to have high technology interest or expertise would excuse themselves from signing up. While this used to be true, it no longer applies in the current Open Source era. There exists such an abundance of platforms that whatever idea you may have, there is someone out there offering support. Whether it is 3D printing, making online videos, or setting up e-commerce, the possibilities to turn ideas into reality is literally at our fingertips. OSI targets the 80% non-techies, not the 20% who are already writing codes.

In fact, Greg Satell, the author at Mapping Innovation, wrote several articles on this technological liberalization. One, aptly titled ‘The Future of Software Is No-Code’, describes the different services already available that empower people who do not know how to code to write programs.

3) We can always help others to innovate: One way to un-stigmatize, i.e. make innovation easier, is to shift the pressure from employees being innovators to employees being think buddies. It is much easier to help others than having to do it yourself. The aim of this approach is to support employees to help each other to innovate. My previous piece, Get Your Employees A Think Buddy To Capture Innovation, explores the skillset that is needed to create such an environment. To be a Think Buddy, employees need to learn to empathize, focus on the idea, improve lateral perspectives, and push for a refined solution. It is like the practice of Coaching. But the coachee is the idea not the person.

How successful are you in creating innovators in your organization? Tame the innovation monster in your people’s head and watch how their ideas can be unleashed!

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.

One of the biggest learnings of the ongoing COVID-19 saga is the importance of leadership and the glaring gaps that it has exposed. In situations of global crisis, we turn and seek leadership at all levels, be it global, national, state, corporate, community, and even within our own family units. ‘Corona Times’ has really thrust the role of leadership into the spotlight and show the consequences of a lack of such.

On a national level, we see how crucial leadership is as different leaders and leadership styles manage the same problem with such vastly differing results. In business, we are starting to see the effects of lockdowns on enterprises and how they are coping with the new environment. Much of course is dependent on a company’s industry and financial standing, those with larger reserves and longer cash runways will theoretically have a better chance of weathering the storm and coming out of this crisis intact.

As lockdowns in most countries have gone into month 2 and beyond, some businesses have closed, some have downsized, others are in survival mode, but a few have pivoted, reinvented, and seem to be coming out stronger. While each company is unique and exists within its own context, the years to come will cite case studies of companies that came out stronger post COVID-19 and when analyzed, one of the common denominators between all these companies success would be the strength of collective leadership it had.

Nations can be forgiven for having inept or under-par leaders. This is due to inefficient systems and politics where the selection of leaders is done (mostly) via elections which in turn can be influenced by emotion, sentiment, and manipulation. However, in the corporate world, this should not be the case.

Decisions on leadership appointments (CEO and senior management) are rational ones, picking from a curated pool of top class, highly capable, and experienced candidates. So, if this is the case why can’t more companies with highly capable and talented CEOs and senior teams weather the storm, pivot, reinvent and find their way through this COVID induced crisis?

All Hands on Deck!

An argument is that senior leadership alone is not enough to pull a company through an economic crisis such as the one we are facing now. One man or even ‘a few good men’ cannot steer a ship in this ‘perfect storm’. It’s all hands on deck and requires the best crew with leaders in each and every department operating at near to maximum capacity to weather this storm.

In order to pull through, corporations need to have leaders leading and operating at each and every level of the organization. Collective leadership from top to bottom is what it required, not just inspiration from a CEO and the senior team.

The more leaders an organization has within its ranks, the higher its chance of survival as it will be able to adapt, pivot, and implement faster than others. How many leaders an organization has within at all levels is a vital determinant of whether a company can not only come out of this crisis, but come out stronger than before. So, given that companies need to have more leaders within their ranks, how do you fill that gap in the face of crisis?

Enter The Business School

Business schools were generally created to fill this gap. To create, develop and nurture top talent into the leaders of the corporate world. The top American Business Schools have been the breeding ground of business leadership talent that has seen American corporations lead global business and commerce since the turn of the 20th century. It is the graduates of these schools which power the majority of today’s Global Fortune 500 companies.

In South East Asia, there is only a handful of institutions that are built on the proven principles of the American Business School model. The Asia School of Business (ASB) is one of the few, setup in 2015 as a one-of-a-kind collaboration between the globally renowned MIT Sloan School of Management and the Central Bank of Malaysia.

The vision is simple, to be a regional platform and hub which creates highly knowledgeable, principled, transformative, and market-ready leaders for corporations in Asia. The method? Integrating the MIT DNA and delivering it in-action within the heart of Asia.

Creating Leaders on the Go!

ASB offers 2 routes to creating leaders on the go for corporations in Malaysia and the region. First is the ASB MBA, an award-winning innovation of the MIT Sloan MBA, integrated and delivered in Asia, taking into account Asian business practices, perspectives, and culture. It blends theory with practice via the leveraging of companies within the region as knowledge partners and ‘classrooms’ to learn in.

The Working Professional (WP) MBA allows corporations to send their top talent (hi-potentials) into this program while keeping them in their current role. It is an integrated journey where candidates immediately implement MBA learnings within their organization while they are studying. The signature ‘Action Learning’ curriculum which is inherited from MIT requires a student to complete 4 specially defined projects in their own company within the 22-month duration of the course.

The candidate spends roughly 25% of their time studying and the remaining 75% at work, applying their learnings into action! These projects are defined and delivered using the MIT Action Learning framework and implemented with facilitation from a dedicated ASB Faculty member and business coach (seasoned ex-management consultants).

Major corporations like AirAsia (Malaysia), Sapura Energy (Malaysia), Phu Hung Securities (Vietnam), and Daiwa Steel Tubes (Japan), have sponsored their hi-potential employees for an ASB MBA in the inaugural cohort of 2019. They are reaping the benefits as the program makes their employees consultants in training, immediately applying their learnings and working on delivering solutions within their companies as soon as they step out of each class.

Group Learning & Development

Now, what if your organization needs to develop more than a few select (Hi-Potential) leaders and requires an aggregated shift in mindset and capability? The answer would be to get in touch with the Executive Education arm of ASB. On the 1st of Jan 2020, the ICLIF Leadership and Governance Centre was integrated into ASB and is now known as the ICLIF Executive Education Centre.

The center offers a complete suite of leadership, management, and governance courses in an open enrollment or custom-built format. Courses can be as short as 1-day programs or a series of modules that accumulate to becoming an advanced certificate in management. For larger groups, the center can develop customized L&D curriculum to achieve strategic objectives of a company.

Plugging the Collective Leadership Gap

COVID19 is here to stay until a vaccine is developed and deployed to the global population. The new normal is unpredictable but what is certain is that the ‘old normal’ is past. To remain competitive, organizations should adopt a strategy to fill their ranks with capable leaders at all levels. The Asia School of business was setup to support corporations to achieve this.

The last time I drove the missus to town for our regular weekly shopping trip I actually counted the number of road signs that I saw on my side of the road between my house to the wet market. Admittedly there were a few that I had never noticed before this despite having plied that route countless times since we moved into the neighborhood in January 2009.

This is not an admission that I have been running through stop signs with impunity and endangering precious lives while pretending to be the Mr Magoo of Bangi but I have realized that if I had driven slower and paid enough attention to the road signs, I am convinced that my journey would be more pleasant for everybody especially the occupants of the car and kinder to the aging jalopy. The signs were put up for a purpose, which is to inform, to warn, and also to educate.

Feedback to me is the breakfast of champions. At home it tells me if I am giving enough attention to my daughter’s schooling, it provides a pretty timely indication if I have been less than disciplined in observing my diet or even if the tie matches the shirt! At work, it is even more critical. It tells us many things. It is a gauge that measures our performance and it can also mirror our behaviors quite reliably.

Just like the environment at home, the challenge is to position ourselves, or to create that very critical personal branding that says, “I welcome your feedback”. So how do we create this positioning?

First of all, there must be a strong enough relationship with our colleagues. This is maybe stating the obvious to some since no stranger is going to walk up to us and proceed with giving us feedback on our performance. However, I feel it cannot be overstated because in my work I have come across too many leaders who fail to do this. They may be too busy with the daily tasks that they fail to focus on creating and nurturing relationships with their people yet at most meetings or townhall gatherings staff are expected to share thoughts and feedback!

If the staff needs to be reminded, to be coaxed and cajoled for feedback then the culture of openness is not yet there. It is up to the leader to set the tone of the organization. If the leader is seen to be generous with his feedback then it follows that the staff too will learn to be easy with their feedback. It is a good idea to begin by sharing positive feedback a few times to make people accustomed to the idea of giving and receiving feedback.

Once there is a comfort level amongst staff with regards to feedback sharing, quickly find opportunities to ask permission from staff if he or she can be given feedback for improvement. The staff identified at this point must be one who is open and comfortable enough to receive such feedback. The positive experience of the conversation may be used to showcase the benefits of sharing feedback.

Throughout this time the leader too must find opportunities to ask for feedback from staff about his own performance. One will be amazed at the results. To maximize the effectiveness of feedback shared there must be a set of criteria observed. The easiest of these is timeliness. Timeliness ensures that the receiver is given the information about her performance as soon as possible.

This also allows her to benefit from it quickly without having to wait until the next time she has a discussion with the leader before she is given the feedback. This is even more imperative if the feedback is one for behavioral improvement. It would be quite damaging both to the person and to the organization if the person continues to project the wrong behaviors any longer than necessary.

The second criterion is being specific. This perhaps poses a greater challenge to Malaysians generally especially since we are so accustomed to our meaningless “interesting la”, “can la” or what, to me, is the single most disturbing of all : “boleh la” replete with the all too famous non-committal tone that usually accompanies it. Being Malaysians we were not trained to be direct, in fact, we are made to believe that being less than direct is actually a virtue in certain situations.

However, in helping a colleague or a subordinate understand with clarity on how and which part of her performance needs improving, the feedback giver must be as specific as possible. She needs to know what was the behaviour observed, its impact on the observer, and, if it is feedback for improvement, a suggested alternative for her future reference as well. I have observed that keeping the impact limited to the observer helps in keeping the interaction focussed.

There is no issue about how “others” might be impacted because the giver has made it clear that he is sharing how he himself felt about it. And I have also noticed that following a conversation such as this, the staff will make an effort to seek feedback from others about her performance, starting with people she is most comfortable with and perhaps, even from those she does not yet consider to be her close friends.

The third and last criterion is ensuring that the feedback given is balanced between the positive and the negative or between the ones for recognition and improvement. This is not to say that for each recognition feedback there must also be a feedback of the improvement variety to follow suit. Or vice versa. This is not about keeping tabs of the types of feedback given either. Instead, it is about the state of mind of the giver.

He must always find the windows of opportunity to share feedback of both types as and when they present themselves. To always be observant about the performance of the team because negative behaviors if left unchecked would wreak untold damages to the performance and image of the organization. On the other hand, the great performance left unrecognized long enough will somehow fizzle out or fall through the cracks.

Leaders should always be aware that the main objective of sharing feedback is to prevent the wrong behaviors from being repeated and to nurture an environment that promotes the right behaviors being practiced until they become part of the organizational culture.

So the question is, are we doing enough to promote this culture?


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.

The future depends on leaders getting more from ourselves and our people. “What can you do with a single grape?” asked Professor Richard Wolfson of Middlebury College, arguably the best physics instructor in America. Back in 1998, I was still a premedical undergraduate student. I have since tried the question with corporate participants in leadership training rooms.

The usual answers remain the same “You can eat it”, “Make wine”, “Dry it into a raisin”, or “Plant it” etc. Dr Wolfson then gave his answer “One grape can run the entire New York City for a full day.” What did he mean? Everything runs on energy. For thousands of years, humans have been perfecting ways to ‘extract’ as much of it as possible from resources.

This is just like an organization trying to get as much ‘useful work’ from its assets, including people. Eating the grape is obviously one way to extract energy. But turning that same grape into electricity for hundreds of skyscrapers? That’s another level of efficiency.

Some key questions to ponder are; How much energy is there in everything (and everyone)? Have we gotten all that we could get?
Or is there more?

In 1905, Albert Einstein published the most well-known equation in the world: E = mc2. Energy and matter convert – and within small mass lies great energy. It challenges mankind to think of energy conversion in a whole new dimension. For example, energy extracted by an average power station needs 1,000-1,500 train bogies of coal each week. A nuclear plant, however, only needs a starting mass of 1 truckload per year to generate the equivalence.

That is 10 million times more efficient. E = mc2 tells us that if we could extract ‘everything’ from the grape, it could run the whole city for an entire day. Following that same logic, could we get even more from our people? Is there some ‘hidden’ potential within us? What can a single person do if we only knew how to unleash our leadership energy?

Here is a recent example of such a phenomenon.

  • A single Person helped 67 million people to lead a good life with sustainability
  • A single Person led 67 million people to focus on good deeds; instead of grabbing whatever and whenever they can
  • A single Person turned 67 million people from fighting to embrace each other
  • A single Person united 67 million souls into one

Unleashing Leadership Energy:

1. Leader as a catalyst.

The King’s leadership is very simple ‘lead by example’. My western friends find it difficult to comprehend what monarch in the current era of capitalism would journey the land for 70 years to visit the poor? Why touch people on an individual basis when you could command the attention of the entire nation? In one recount, the King literally ‘ducked through barbwires’ to find water for an unknown remote village.

Some may think it was position power. “Oh, He is the king so leading was easy. Just give orders and people would do them. That’s how top-down authoritarian system works anyway”. If being a leader were that easy, then wouldn’t the world be full of them?

2. Resonance effect.

The King caused waves of good deeds. When a person takes on tasks with fearless purpose perseveres against obstacles and resistance – it affects people. When we see good deeds, they inspire us to do good things. Like how yawning spreads a room, the mirror neurons inside our brain begin to imitate.

King Bhumibol’s quote in 1996:

“…Honest people can make others become honest. Goodwill is infectious. It is true that dishonesty may corrupt honest people. But if honest people are steadfast in their honesty, it will be difficult for dishonest people to turn them. It is therefore imperative that honest people remain strong…”

3. Nuclear reaction.

There is greatness within all of us. Dr. Wolfson explained Einstein’s secret of using a single grape to feed the whole city of New York. “Shift your focus from ‘extracting’ to ‘igniting’”, he said. “Einstein revealed that within small mass there is great energy”. Mahatma Gandhi, Dr. Martin Luther King Jr., Nelson Mandela and His Majesty King Bhumibol Adulyadej the Great of Thailand, all are leaders who ignited the nuclear power inside their people.

With His passing on 13th October, I have a friend who recently stood in line for 15 hours straight from 5:30 am to pay respect inside the Royal Palace. She finally got in at 8:30 pm. The first person in line was there at 6 pm the day before. That is the kind of human energy that can run entire cities for days – and organizations for years.

A single person initiated chain reactions that created better futures for almost 70 million people.
That is what the King of Thailand did with his ‘one grape’.
What are you doing with yours?

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.

Earlier in March this year, the 32nd ASEAN Capital Markets Forum (ACMF) Chairs’ Meeting was held in Hanoi, Vietnam, to finalize actionable recommendations under the Roadmap for ASEAN Sustainable Capital Markets, the concept of which had been endorsed by the 5th ASEAN Finance Ministers and Central Bank Governors’ Meeting just over a year ago in April 2019.

It was during this ACMF Chairs’ Meeting in Hanoi where four students of the Asia School of Business (ASB) presented their findings and recommendations to the heads of capital market regulators in the ASEAN region. ASB was commissioned by ACMF, with support from the Asian Development Bank (ADB), in the Fall of 2019 to undertake an initiative that would further explore the opportunities for the ACMF to facilitate and mobilize private sector capital for the financing of sustainable projects via the capital markets in ASEAN.

ASB had taken this unique opportunity to allocate the project to its senior class students interested in capital markets and sustainable development. Students from the MBA Class of 2020 – Duncan Marwick (South Africa), Janice Tan Ying (Malaysia), Rajiv Chawla (India), and Zoe Victoria Tate (United Kingdom/Netherlands) – volunteered and were selected to embark on this journey to produce a roadmap as an ‘Action Learning’ project during their 4th Term at ASB.

These four students were on the road attending different platforms in the region to comprehensively engage with high-level stakeholders from all three sectors – public/private/non-profit – so as to gather as much data and insights as possible in formulating a universally-acceptable set of recommendations.

The Roadmap provides a strategic direction and recommendations for the creation of a sustainable asset class in ASEAN to support ASEAN’s sustainable development agenda for the next five years so as to mitigate the social and environmental risks linked to climate change. The document sets out recommendations under four priority areas, namely strengthening foundations, catalysing products, and enabling access to under-served areas, raising awareness and capacity building, and increasing regional connectivity.

Deputy Chief Executive of the Securities Commission Malaysia (SC Malaysia), Datuk Zainal Izlan Zainal Abidin, thanked ASB and the students for their significant contribution towards the development of the Roadmap. “On behalf of the ACMF, I would like to express my appreciation for the efforts put in by ASB in delivering this collaborative work.

It was inspiring to have the students, tomorrow’s leaders of the world, take part in this important ASEAN initiative, which charts the path for the future in which sustainable finance will play a key role.” SC Malaysia is co-chair of the ACMF Sustainable Finance Working Group and served as a facilitator in the development of the Roadmap.

As expected, these findings and recommendations were not something that materialized overnight. For these four students, it was certainly not the typical 3-month ASB Action Learning project conducted in 1 academic term. Due to the extensive and complicated nature of this topic, this initiative was extended through to their 5th and final term before graduation, making it a 7-month endeavor.

Under the continued attention and guidance of ASB’s renowned faculty in Central Banking – Professors Gabriele Ciminelli and Hans Genberg – the students had committed themselves to go above and beyond their required curriculum, taking in significantly added workload to digest their schedules on top of academic studies and post-graduation job search, resulting in the successful delivery of this Roadmap document.

 “This project gave us deep exposure to the highly relevant and urgent topic of sustainable finance, which is a growing area of significant interest to our generation and more to come. The opportunity to engage with global leaders, navigate complex multilateral relations, and present our final report to high-level representatives from the 10 ASEAN member countries provided the team with an unparalleled MBA learning experience that we would not have had otherwise. We are grateful to ACMF, SC Malaysia, ADB, ASB, and all others who provided mentorship and guidance to ensure the delivery of a successful project,”

Duncan Marwick (MBA Class of 2020)

ASB Professor of Finance and Director of Central Banking, Dr. Eli Remolona, congratulated the students and said, “Our students worked hard on this 5-year roadmap. They helped develop it through extensive discussions with major stakeholders. We hope that this will contribute meaningfully to shaping ASEAN capital markets that support a sustainable future.”

The Roadmap was originally planned to be presented at the 6th ASEAN Finance Ministers’ and Central Bank Governors’ Meeting in April this year, but that has been postponed to a later date due to the ongoing COVID-19 pandemic situation. ASB President and Dean, Professor Charles Fine, commented that “ASB is honored to have taken part in this regional initiative and we are truly proud of our students and the faculty who supported them through the School’s Action Learning program.

I believe this world-class, professional work that has been delivered in and outside the classroom demonstrates the level of excellence we ask of our students. It is also a reflection of the strong commitment that ASB’s faculty and staff have to offer its students, external partners, and ultimately, the community which we take part in trying to make a better place.”

A digital copy of the Roadmap has recently been made available to the general public and can be downloaded from here.

If you are interested to know more about hosting an Action Learning project with ASB, please contact actionlearning@asb.edu.my.

The issue at stake

It is not easy for most central banks to lend to small businesses, even when they wish to do so. Indeed, during the COVID-19 crisis, this is something they have been called upon to do. Central banks are geared up to lend to governments and to banks, but not to lend to small businesses. The reason they exclude small businesses is the need for good collateral, which most small businesses lack. What then can central banks do in this situation?

What many central banks have done is give commercial banks the incentives to do the lending. Bank Negara Malaysia, for example, provides regulatory relief, which allows small borrowers to postpone principal repayments, without the banks having to report the loans as non-performing assets. The Bangko Sentral ng Pilipinas allows banks to count loans to small businesses against the reserve requirement. These are good incentives to get banks to lend to small businesses. The policy issue at stake, however, is whether there is a way for central banks to provide the money directly for such lending. Can they do so in a simple way?

The hurdle

The hurdle many central banks face is that they operate under a rule promulgated by Walter Bagehot in 1873. In his classic work, Lombard Street, Bagehot said, “… a central bank should, in a crisis, lend freely, against good collateral.” That rule has been enshrined in the laws under which mamy modern central banks operate. The U.S. Federal Reserve, for example, is subject to the so-called “Section 13 (3)” of the Federal Reserve Act, which states that the Fed lend only against good security, even in “exceptional and exigent circumstances.”

The loan-pooling SPV

Nonetheless, in response to the COVID-19 crisis, the Fed has essentially been able to lend to a large number of small businesses. The mechanism it uses is called the Main Street Lending Program (MSLP). The legal device that allows the Fed to meet the good collateral requirement is a Special Purpose Vehicle (SPV) that pools the loans together. Indeed the use of this device at the Fed has become almost routine. It is used for the Fed’s other crisis-related programs, namely the Primary Market Corporate Credit Facility (PMCCF), the Secondary Market Corporate Credit Facility (SMCCF), and the Term Asset-Backed Securities Loan Facility (TALF).

How does the SPV provide loans to small businesses? An SPV is a legal entity that is created for a specific financial purpose. The Fed creates such entities as its subsidiaries. In the MSLP, as shown in the diagram below, the Fed gathers from several banks a large pool of their small business loans, but choosing only those that satisfy certain criteria. This pool of loans is then placed in an SPV as its assets. With those assets serving as collateral, the Fed then lends to the SPV, which can then pay the banks for the loans in the pool.

Here the Fed does not lend directly to small businesses. It lends to them through the SPV. In practice, the banks know the loan eligibility criteria in advance and they make loans in anticipation of selling them to the SPV. The banks hold on to a residual of about 15% of each loan, so that they retain “skin in the game.” Pooling the loans in the SPV then allows the risks of such special crisis loans to be managed separately from the rest of the banks’ loan portfolios. As the small businesses repay their loans, the SPV repays the Fed.

Managing the risks

What makes the SPV’s assets count as good collateral? The short answer is risk management. Here the fiscal authorities also need to play a role. The ministry of finance would put just enough equity in the SPV to absorb likely credit losses. At the same time, the small business loans that go into the pool are chosen so that their risk characteristics are well understood. This means the risks of the pool as a whole can be carefully analyzed and managed. The analysis would tell the central bank how much equity it would need from the fiscal authorities.

The analysis would provide estimates of the average probability of default of the loans and the average loss given default. More importantly, the analysis would provide estimates of the correlations of defaults in times of stress. These estimates then lead to the calculation of the “value-at-risk,” which is the highest amount that could be lost from defaults for 99% of the time. In the case of the Fed’s MSLP, this amount is calculated to be 12.5% of the size of the SPV. Hence, for the pool of loans to be considered good collateral, the U.S. Treasury provides $75 billion in the form of equity in a $600 billion MSLP.

Keep it simple

While not all emerging market economies have the laws that permit SPVs, some do. Two jurisdictions that already have the legal framework for SPVs are Malaysia and the Philippines. In these countries, the central bank could already set up SPVs to provide loans to small businesses during a time of crisis. It is the SPV structure that allows the central bank to meet the “good collateral” requirement. Yes, the national government would need to agree to provide a small equity backstop. When the government is providing crisis funds anyway, the central bank’s SPVs would serve to leverage up those funds.

Should the central bank decide to set up an SPV for purposes of lending to small businesses, it should keep the structure as simple as possible, as it is for the Fed’s MSLP described above. At present, SPVs suffer from a poor reputation because of their role in the 2008-2009 global crisis. In that episode, subprime mortgages were bundled up in SPVs, the risks of which were misrepresented by lenders and underwriters. The more complex the structure, the easier it was to deceive investors. The belated recognition of the actual risks helped to precipitate the crisis. It is telling, however, that other loan-pooling SPVs with simpler structures, such as Collateralized Loan Obligations (CLOs), emerged from the crisis largely untainted. The lesson from all this is that the SPV technology itself is not the problem, but it pays to keep the structure as simple as possible.

If you are interested to know more about our exciting Master of Central Banking program click here.

This blog is a thought piece and synthesis informed by the ASB webinar “Marketing for a New Normal” held 29 April from 3:00pm to 3:45pm. This features insights from Willem Smit, Assistant Professor of Marketing at ASB, as well as from guest speakers: Arun Menon, Managing Director of IPSOS Malaysia and Jocelyn Pinto, Manager, Data Strategy and Analytics at ADA.

No firm can accurately predict what the “new normal” will be, but there are ways to get ahead of the curve in finding out what that a new post-COVID reality looks like. In a race against the clock, it is very tempting to act quickly, but before jumping into action, marketing professionals and brand managers need to ask for themselves the following elementary questions first:

  • Consumers staying at home: what is going on? What does the data tell us?
  • Post-COVID when they come out of their homes: will there be a “new normal”?
  • How should companies respond to a rapidly changing customer reality?

To give up-to-date market insights into these elementary questions, we have leaders in customer intelligence, global market research company IPSOS and the regional’s largest data-driven agency ADA, share their current consumer observations. Based on their observations and evidence-based recommendations from Marketing Science, we as a panel distilled the following eight lessons for preparing for different future scenarios of a New Normal.

Question: What is the best marketing strategy for a firm facing a recession?

Recessions and downturns are not new and have been a topic of study for a long time. To systematically learn from what we have learned from those past experiences, we turn to Marketing Science, and specifically to empirical studies examining the survival and success of firms and brands going through recessions, downturns and crises. We find two clear Don’ts for marketing strategy in a downturn.

Lesson 1: Don’t cut marketing spending.
While everyone including your rivals are affected by a recession, it is important to stay competitive. Cutting your marketing budget during a recession is not a good idea as it harms your long-term performance. Studies have shown that it is critical to keep “share-of-voice” in the marketplace as firms which reduced spending experienced a signifiant loss in market share coming out of the recession.

Lesson 2: Don’t use price promotions.
It makes sense to become lean and cut the regular price in a recessionary market, as many more consumers have become more price sensitive. However, if you don’t have enough resources to sustain a lower price level and you can only afford a temporary reduction in price, don’t do price promotions.

Once you have to return prices to the higher original level, you will disappoint and lose customers in the long run. Furthermore, the effectiveness of price promotions very much depends on consumer sentiments. When people are generally not in a good mood, promotions lose much of their effectiveness as advocates of a certain product or brand.

Question: Is this [recession] going to be a “normal” recession?

If this downturn was comparable to previous ones, it would be easy to base our expectations on the experiences from our recent past. The 11 post-World War recessions in the US lasted 8-11 months on average. But is this going to last 8 or 12 months?

Lesson 3: Understand this true uncertain nature of the COVID-19 downturn.
Given the unique nature of the COVID-induced nature of the recession, it was initially expected that it would be a V-shaped recession: a quick dip followed by a rapid economic rebound. However, flattening the curve is taking longer than expected in most countries; While China seemingly managed to do it in 7 weeks, other countries may take longer.

In this unique downturn, the exogenous factors are unprecedented. In the sense, the turbulence and risk is one of true uncertainties, as described by the famous economist Frank Knight: an uncertainty of an “unknowable distribution.”

Lesson 4: Increased variability requires a higher need for continuous market intelligence.
Now that globally a V-shaped rebound has become unlikely, and the COVID-19 uncertainty has introduced a “period of forced experimentation” during which consumers, firms, schools, governments and other stakeholders had to adopt digital technologies, rethink work practices (WFH), design 6 ft procedures, managing clogged-up global supply chains, etc.

So many changes in such a compressed amount of time. Therefore, it is important to know where these new directions are leading to, over time. Yet, it is not possible to gather information about the market by means of our traditional information channels. We are faced with empty streets, consumers at home and businesses split in essentials and non-essentials. There are fewer places to make in-person observations to sense what is going on. However, market research companies and big data firms can fill the gap for these insights and help make this “new reality” less opaque and more transparent by making the distributions more knowable.

Question: What is going on with consumers staying at home. What are they doing and thinking about in this lockdown situation?

Lesson 5: Discover new consumer moments for brand connection without being opportunistic.
While the world is self-isolating, society and people do not live in isolation. IPSOS research shows that home-bound consumers are finding ways to stay connected and communicate. Observable changes are the rise in popularity of topics like managing mental health, celebrating life events virtually, and finding new activities to do in quarantine among others.

These new conversations have led brands to revaluate and reactivate their purpose, relevance, and ways of engaging with their consumers. In order to place themselves strategically and meaningfully in the midst of the chatter, brands must remain authentic and faithful to their identity. Brands need to find the right tone and story to tell within the context of COVID-19 which has revolved around being caring and compassionate. It is also important to remember not to pander too much to your consumers and retain a level of authenticity when engaging. Finally, understand the personally groups in your market and create a strategy for how to reach out to them meaningfully.

Lesson 6: Understand the different consumer responses to COVID-19.
A study conducted by ADA of over 400,000 applications yielded insights into eleven types of “COVID-personas”. Each persona represents a type of mindset as shown through their app-behaviors consumers use the most.

While some personas are more financially minded, others are health-conscious and searching for apps to support their physical and mental health. Another type is more forward thinking, traveling in their mind to places abroad and hoping to go on a trip soon again. What these personas really highlight is the fact that people are in different mental space in current times and this underscores the importance of brands in reaching their customers with the relevant messaging.

Question: When consumers come out of their homes, will they see a new normal?

Two extreme perspectives on the New Normal prevail. The first view is that a new normal will emerge as a result of an intense period of “forced experimentation.” More working remotely, more online shopping, both digital and distance have become new norms post-COVID.

The opposite point of view is that people are hard-wired and will go back to normal and return the old ways of doing things before COVID-19. This view strongly believes that life experiences and activities such as in-person classes, grocery shopping will come back at the same level and virtual options will stay limited.

Question: How should companies respond to a rapidly changing reality?

Lesson 7: Personalize your marketing to the new COVID-19 personas.
Absolutely crucial for marketing professionals and their firms is to understand and cater to each unique persona differently and strategically. To spread a same message too broadly to hit all personas at the same time makes the brand tone-of-voice sound too generic and unable to resonate with people’s varying mindsets especially in the context of COVID-19. Worth noting across all personas is that they all react in different ways which makes it doubly important to remain relevant to consumers.

Lesson 8: Anticipate the phases your consumers are going through.
The path towards regaining momentum post-COVID will be gradual and go through different phases. IPSOS research in China on post-lockdown communities showed that some residual feelings of uncertainty and fear may still affect consumer behavior. Taking advantage of these changes in consumer behavior can be done by anticipating and creating engagement phases.

This starts with the “preparation phase” where the consumers are re-familiarizing themselves with your brand, followed by the “adaptation phase” in which consumers adjust to the limitations of their context and what they can buy. Now consumers are moving into the “anticipation” phase where they are looking forward to releasing lockdown measures. Once a sense of predictability has been established, consumers and marketers enter into experimentation where the desire to explore new things fuels creativity and innovation.

This applies to how consumers create new food options, for instance, out of what they have and brand creating new aspects to their products to spur greater creativity. The last phase is expectation. Both consumers and marketers must accept that the road ahead will still be rife with changes which requires greater agility and creativity to be able to respond to the next six months.

Conclusion

There is no playbook for marketers on how to deal with a global recession caused by a global pandemic. Critical is to avoid taking unproductive and ad-hoc responses to a downturn. Don’t cut the marketing budget and don’t start giving price promotions, because the length of this recession can be unpredictably long. The first step is to intensify market intelligence capabilities to learn quickly from keeping the fingers on the pulse of new evolving developments.

The lessons and principles are a result of keen observations, analysis and detailed inquiry into how people are navigating the “new normal” and are by no means the golden rule of marketing in a recession. However, it pays to always lean into the observable shifts in people and society to ride the wave of these changes and use these to your advantage as a marketer in the midst of uncertain times.

These changes include the rise of new interests, personas and mindsets shaped by the environment created by the pandemic. This also means marketers must discover new and creative ways of authentically engaging with the different consumer responses to COVID-19 with a keen awareness of their mindsets, behaviors, and even process as we collectively navigate the inevitable new normal.

Willem Smit is Assistant Professor of Marketing at the Asia School of Business and International Faculty Fellow at MIT. His expertise is on marketing strategy; his scholarly work has been around the theme of “Marketing Strategy Heuristics in search of superior performance”, in particularly on the newly revolutionized and digitized decision environments for marketers.

After earning his PhD from the Rotterdam School of Management, Erasmus University, Willem became a research fellow at IMD, where he also designed and delivered executive development programs for multinational companies in the telecom, pharmaceutical and consumer-packaged goods industries. Before joining ASB, Willem has taught at various schools in the Asia-Pacific region: NUS National University of Singapore, SMU Singapore Management University, TongJi University, Hult Shanghai, and MIT affiliate Malaysia Institute for Supply Chain Innovation.

He can be contacted at willem.smit@asb.edu.my

Send us your enquiry now at contact@asb.edu.my to develop and design a customized program for your organization.