Asia Inc

LALU PRASAD, India’s railway minister, was in Singapore recently. He was invited by French business school Insead to give a talk on how he changed the near-bankrupt railway monopoly into a thriving business with a $6-billion cash surplus.

Minister Lalu, who had repeated the same address in many other graduate business schools worldwide, again spoke in a lecture hall with standing room only. Jam-packed with students, faculty members and business executives who laughed, cheered and lapped up his every word, the minister was addressed as “Professor Lalu” despite his lack of formal academic qualifications. 

Frank Brown, dean of Insead, admits in an interview with The Edge Singapore that neither is he entitled to be called “professor”.

Two years ago, Brown’s appointment as head of the business school, raised quite a few eyebrows. He was never in academia, holds no advanced degrees and has no doctorates, not even an MBA — Insead’s core offering.

But the American brings with him 26 years of solid global business experience, accumulated at PricewaterhouseCoopers (PwC) when he held many key positions and handled numerous major projects, including the sale of PwC’s consulting arm to IBM. 

Furthermore, Brown is no stranger to Insead as he was a member of the school’s board of directors and chairman of Insead’s advisory council. Brown’s appointment — controversial as it might seem to some — is an indication that academia is fully receptive towards the idea of learning not just from the researchers, but also the practitioners.

He is certainly not in the least concerned about the credibility of one who does not have an MBA teaching a group of elite MBA students. “You have to make the distinction between someone who is an academic, who is teaching a course of study, and someone who is a business person, who is sharing their ideas and experiences in business. Lalu and I are in the latter category,” he says. 

“We are definitely not academics, but I have the greatest respect for academics and what they teach, because they have the training and the background and, in some cases, the experience. All I have is the experience, so I love to share it. I like to talk about my thoughts, particularly on subjects that I think I have good information on. I don’t pretend to be an academic,” says Brown.

“The way academics do research, they actually base their conclusions on facts, and I base my conclusions on my experiences, on my own opinions, and on intuition — but certainly nothing scientific. So, in a way, it’s good to have both and, in some cases, it is good for me to share my views,” adds Brown. 

Some types of experience are more valuable than others. Increasingly, business leaders need to be exposed to different cultures, different ways of thinking and behaviour that cuts across borders. Businesses need to expand into new markets, Frank Brown, dean of Insead, explains why experience counts in training leaders for cross-border markets and business leaders do not have the choice of working only in markets they are familiar with, and delegating the management of new, foreign markets to others. For Insead, an institution that proudly positions itself as “the world’s business school”, the transcultural mentality is, of course, something that Brown and his colleagues are quick to emphasise. 

In his current job, Brown spends half his time in the French campus in Fontainebleau, and up to 10 weeks in the Singapore campus. The rest of his time is spent on the road at various locations, fulfilling speaking engagements, meeting major customers for Insead’s executive programmes, as well as visiting alumni in dozens of countries. By his own calculation, he has travelled to 47 countries throughout his career in PwC and as the dean of Insead. 

Brown recently published a book entitled The Global Business Leader: Practical Advice for Success in a Transcultural Marketplace in which he distills his years of experience in the business world, providing pragmatic advice for business executives, and explaining the need to build bridges and how to lead across cultures, geographies and other traditional boundaries — inevitable in today’s globalised business environment. 

 

“Transcultural leaders will usher their companies into new markets, drive growth and social responsibility, and set the stage for growth for future success,” Brown states in the book. 

In advising clients on mergers and acquisitions (M&As) as a PwC consultant, Brown has certainly seen his fair share of how and why things do not connect due to cultural differences. “I saw a lot of failures in negotiations, and misunderstandings,” he recalls.

“You can’t just do business in one country anymore. You can’t just do business in other countries by sending people from your country, so that you are comfortable when you get there. It doesn’t work,” he says. 

Brown has plenty of anecdotes to share. He says once, he was leading a team of 20 people from at least 15 ationalities, to discuss a new multinational venture, and among the key issues discussed was the venture’s name, which was used throughout the discussion. Just as he was about to wrap up this otherwise smooth meeting, he asked each participant: “How will this idea work in your market?”

It was only then that a “quiet fellow from Asia” said: “I think it will be okay, except for the name. It means ‘your ugly sister’ in my part of the world.” Having just “dodged a major public relations disaster”, Brown wrote in the book: “Why hadn’t that fellow spoken up sooner? I do recall that he was a bit jetlagged that day. But the answer is that, in some cultures, it would have been rude to do so.”

“You shouldn’t walk into an Asian context with an Anglo perspective; you shouldn’t walk into a European context with an Asian perspective. That doesn’t mean you have to know everything about those cultures, but you have to have enough awareness, because otherwise, you won’t be able to function. You won’t be able to negotiate, you won’t be able to share stories, share a meal, whatever. And that’s when things break down,” says Brown.

But, isn’t it the case, especially in M&A deals, that the successful conclusion of a deal depends entirely on the right price? Where does the issue of culture come into the picture? Brown has a ready answer for this based on his personal experience.

He once witnessed a negotiation between an American buyer and a Scandinavian seller. “They had completely different understandings of pace, of how to negotiate. One party was totally straight, and the other party was, you know… and they never saw eye to eye,” he says. “I had another deal break down, because the Asian party that was buying thought that submitting a bid lower than the asking price would be an insult to the seller. I couldn’t correct this misinterpretation because I didn’t know; they didn’t explain to me why they didn’t bid. I said, ‘You could have bought it for x dollars,’ but they said, ‘No, we don’t feel right doing that, because that is less than what they are asking for, and that is insulting,’” says Brown.

 

From his point of view, several transcultural business leaders qualify as role models. They include Carlos Ghosn, the Brazil-born Lebanese who was educated in Lebanon and France. Ghosn is CEO of both Renault and Nissan, and gained fame and admiration for turning Nissan around. The others are Sam Palmisano, chairman and CEO of IBM, who is trying to master the Japanese language, and John Thain, CEO of Merrill Lynch, who, when he was CEO of the New York Stock Exchange, led a trans-Atlantic tie-up with Euronext, a Paris-based pan-European stock exchange.

To be sure, not everybody — even if they are Insead graduates — can reach the pinnacles of the business world like Ghosn, Palmisano or Thain. But it is not far-fetched to say that more things will get done if transcultural differences can be bridged, and experience shared and gained.