The Lessons of Asia’s Dynamic Owner-CEOs for Today’s Challenged Leaders
Chief executives don’t have it easy: geopolitical uncertainty, market volatility, disruptive technology. But they can learn from a group of people who have seen it all and thrived regardless. They are Asia’s corporate owner-CEOs.
The modern CEO faces a daunting in-tray. They must deliver consistent short-term returns for an expectant market while attempting to pilot their business for long-term megatrends, against a backdrop of geopolitical uncertainty, unpredictable trade policy, FX volatility and technological change that is developing at a ferocious pace as AI reshapes the world. It is a time to seek role models, and fortunately, a constituency of them is at hand.
Asia’s owner-CEOs punch above their weight. Over the past two decades, they have accounted for nearly half of the value created among the top decile of Asian companies, outperforming every other ownership category. Their behaviors have often been refined through many generations – through financial crises and political change, technology disruption and shifting trade patterns – and they are as relevant as they have ever been. Leaders navigating today’s brittle and disrupted markets can learn from them.
Through hours of exclusive, candid interviews, 30 of Asia’s most successful owner-CEOs shared the influences, traits and behaviors that have helped them deliver these outsized long-term returns.
These owners share a unique set of traits. They build deep networks of relationships as core assets because they can learn from them. They are adept at holding contradictory thoughts, focusing on the big picture and minute detail at once, and they act decisively at speed. They eschew the work-life balance distinction, thinking of them as one and the same: some are still working deep into their eighties.
Their mindsets manifest in six common behaviors – all of them repeatable by new generations of leaders.
One is being driven by mission. Many consider profitability to be secondary to a sense of purpose, often on a national or societal scale – and then make considerable profit in the pursuit of that mission. Sarath Ratanavadi considers the growth of his company, Gulf Development, entwined with that of its home, Thailand: when one grows, both grow, a national and commercial success at once. Mukesh Ambani of Reliance Industries launched the ambitious Jio Platforms telecommunications business not just to make money but because he felt India needed to move forward in its embrace of digital connectivity. “Wealth must have a purpose,” he says.
Another is the ability to operate the telescope and the microscope simultaneously: to prioritize the long term vision, while paying fastidious attention to the day-to-day needs of the business. In this way owner-CEOs not only spot megatrends early, but use today’s performance to enable tomorrow’s transformation. Wee Ee Cheong of Singapore’s UOB bank positioned for Asean’s enormous growth potential when he bought four Asean consumer businesses from Citi; it was his laser focus on day-to-day operations at home that had granted him the capital to do so.
Owner-CEOs are bold but bounded on risk. When Jaime Ayala of the Philippines’ Ayala Corporation took on the broken East Manila water utility concession, this looked like a maverick bet. But their risk appetite is routinely misread. Owner-CEOs underpin these brazen moves with disciplined risk management, and it is this caution that enables the boldness. What echoed across conversations was not appetite for upside — it is rigor about the downside.
Asian owner-CEOs pursue innovation as both moonshot and milestone. When Narayana Murthy reinvented global IT services with Infosys, and Uday Kotak built a new kind of financial services firm for India with Kotak Mahindra, they were practicing one form of market-shaping innovation. But Asia is also where the concept of kaizen was invented, the idea of building innovation through a relentless series of small but continuous improvements. Both are equally important in the mind of the owner-CEO.
They also insist upon keeping their innovative mindset fresh. Sidney Lu at Hon Hai in Taiwan expects himself and his colleagues to come up with a ‘wow’ innovation – the idea of doing something differently to what is expected – every three years. “That way you stay current and you stay young,” he says. It’s an attitude now commonplace across the Taiwanese supply chain industries.
Owner-CEOs bring a sharp focus on customer service to innovation: they know that if a clever new product doesn’t serve a clear customer purpose, it is a pointless indulgence. They also know how to learn from the best of global technology to make it their own, often leapfrogging the markets from which they borrow.
They have learned to derive extraordinary outcomes from talent. They like the blank canvas, and prioritize character and cultural fit over seeking established expertise, shaping people internally once they are hired. They push talent into stretch roles. They back relatively unproven leaders early while judging performance over the cycle rather than by a single quarter.
“If someone had passion for our vision and goals, we would just have them on board,” says Falguni Nayar about beauty e-commerce platform Nykaa’s early days. Once in, they could be taught culture: today she runs business planning sessions with 200 staff at once to make sure people learn that culture directly from her.
Any organization faces the challenge of scaling without losing its soul, preserving an entrepreneurial ethos even as it grows. Owner-CEOs have precise techniques to implement this philosophy. They keep units small and nimble, they fight silos, and they ensure they listen to customer-facing employees on the front line. Vietnam’s Techcombank, for example, has an internal group of change agents called REDS who act as cultural ambassadors for the bank, so the chairman’s ideas are successfully communicated as the bank grows.
Perhaps the biggest challenge owner-CEOs face is to put institutional systems in place to outlive them, and to ensure that the dominance of their own personality does not impede succession. “If what you build does not outlast you, you have failed,” says Uday Kotak – but a larger-than-life leader is not easily replaced.
Leading professional CEOs already display many of these behaviors, overcoming the restrictions of fixed tenures, quarterly reporting and limited personal equity. Leaders looking for inspiration in today’s dynamic world might learn from the ways Asian owner-CEOs have built national champions, and global competitors, in unforgiving markets characterized by competition, uncertainty and dynamic change. Being decisive, yet able to manage contradictions, has never been a more useful skill set than it is today.
Gautam Kumra is chairman of McKinsey’s offices in Asia, based in Singapore. Joydeep Sengupta is Senior Partner, based in Singapore, and leads the McKinsey Center for CEO Excellence in Asia. Both are co-authors of an upcoming book, Shapers and Founders: The untold stories of Asia’s extraordinary owner-CEOs.