Human resources 'the backbone of a company'
As Thai corporations, like Siam Cement Group (SCG), venture into new business territory, they realise that sustainable excellence can only be achieved when the corporation is equipped with the best hardware and software, with well-managed human resources as the backbone.
While hardware comes in the form of input from the management team in line with the company's vision, SCG president and CEO Kan Trakulhoon says software refers to employees' creativity and this can prosper only with supportive HR strategies.
In an executive talk, hosted by the Nation Group and Nation University's Faculty of Business Administration, he insisted that despite the changing business environment, the four core values of the group were maintained with a slight change - the group must be open and ready to cope with challenges.
"We're embarking on what would enable SCG to sustain leadership through the tough competition of today and tomorrow," he said.
Kan played a pivotal role in making changes happen, including the innovation that sustained the group's business despite global uncertainties and disastrous floods at home.
The group learnt well its lessons from the 1997 financial crisis, when it was forced to liquidate non-core businesses and saw the workforce dwindle from 35,000 to 16,000 in 1998. Now, it believes that as long as it adheres to the four core values, the company can weather any storm.
The core values are adherence to fairness, dedication to excellence, belief in the value of individuals and concern for social responsibility. As SCG sets its sights on becoming a leading Asean firm, Kan sees the need for the organisation to be open-minded, eager to learn, open to networking and collaboration, as well as being ready to learn from mistakes. Plus, SCG needs to think out of the box, take risks and be willing to take initiatives. Would this change if some of existing employees leave and new ones join under SCG's 2015 vision for 38,000 employees, with 25 per cent of them foreigners?
"The values will not go away, even if SCG welcomes a new chief," he said.
He added that fairness meant SCG would not take advantage of suppliers and other stakeholders. Regarding excellence and individual values, SCG spends thriftily on its employees. Each year, executives win scholarships to further their studies at world-class universities, aside from executive programmes. On corporate social responsibility, SCG applies its practices at home and overseas. It copes with challenges well, thanks to the huge investment in research and development, which last year cost about Bt1.3 billion. Now, with 38 high-value-added products, it can weather any storm as sales are not hit by global uncertainties. "We must change the mindset. Thais can excel in terms of innovation if we're committed to it."
Kan diligently delivers lectures to employees in order to ensure mutual understanding.
Following the core values yields fruitful results. SCG failed in its first attempt to expand overseas. Then, it followed the joint-venture format, allowing overseas partners and their families to run factories. Now, it has learned to establish a distribution network first, to market its products. When the presence is strong enough, a manufacturing plant is set up. For example, SCG distributed its cement in Cambodia for more than nine years before investing in an 800,000-tonne cement plant. In merger and acquisition cases, delegated staff are now involved from the very start - from the due diligence process to acquainting themselves with existing executives.
"The new territory has changed. From a domestic player, we have to cope with the Asean Economic Community. Now, we realise that we need to know overseas markets first. R&D teams must be decentralised and we know that a single HR package will not work," he said.
Inspiring employees are schemes like "Career Click" whereby employees can apply for a job offered by a company in the group. The doors are open to new employees with a "think-out-of-the-box attitude". Execs are sent for two-month-long development programmes, while succession plans are regularly brushed up to ensure continuity. Engagement model is employed to ensure high retention, which has resulted in only three resignations in the six years that Kan has been in office. To retain successful employees, Kan said that the priority is the company must be clear in its direction.
HR strategies are of increasing importance as the company gears up for regional expansion, he said. Cross-cultural diversity is imminent, requiring the company to prepare local staff for overseas work. For smooth operations, executives with scholarships are expected to introduce changes. Every quarter, executive meetings are hosted in Thailand, on top of regional meetings, which took place in Vietnam in 2007, the Philippines in 2008, Myanmar in 2010 and Indonesia this year. The first priority for promotion is ethics, as "we're ready to fire anyone with tainted morals. We still have many left." While executives are offered challenging jobs and freedom, they also enjoy satisfactory remuneration, which is benchmarked with global companies.
While citing that leaders should give employees what they want before demands are filed, he advised CEOs to listen wholeheartedly to their employees' voices as their experiences may be inapplicable to some situations. All employees must be equally treated and good ideas must be supported. No face-keeping is allowed.
"Bosses can lose face, but it's alright if that's healthy for the organisation," he noted.