E-COMMERCE logistics solutions provider DHL eCommerce places much emphasis on diversity and the need to understand local differences, reflecting its belief that diversity brings greater perspectives and|fosters growth and innovation, Kiattichai Pitpreecha, managing director of DHL eCommerce/Southeast Asia, says.
“This is where cross-cultural management presents significant value and opportunities, when managed properly,” Kiattichai says.
Over the years of his management experience in the logistics industry, he has learned that successful cross-cultural management broadly comes down to three things. The first one is about promoting open communication.
“Communication is key in managing people from different cultures. It all starts from having a clear vision of what an organisation strives to become and transparency on where we are and what we are doing as a team to deliver our aspirations,” Kiattichai says. “Promoting open communication at all levels provides an opportunity for management to stay close to what is going on in the organisation as well as in the market. I like to spend time with employees either in a casual one-on-one dialogue or in a small focus group as employees are in general more open in these settings.
“This helps us to understand the challenges of the employees on the ground and how we can improve in various aspects of our business. Open communication also fosters trust and closes the gap between management and employees while improving the engagement of people within the organisation. Fifty per cent of engagement challenges can be addressed by proper communication.” The second thing is to empower people.
“As the business is growing rapidly, it is important to empower the team on the ground that is closer to the market to make decisions in order to come up with ideas and solutions to the problems. Empowerment is a powerful way to get people involved and cultivate a sense of ownership,” Kiattichai says.
In a multicultural environment, empowering local people is the only way to harness the local knowledge and understanding, and use these assets to their fullest potential. In this aspect, the role of management is shifted towards a facilitating one as opposed to dictating what and how things have to be done, Kiattichai says.
The third one is to create and live the organisation culture.
“While capitalising on cross-cultural diversity, companies can be further strengthened by instilling a common corporate culture where certain sets of values are shared across the organisation,” Kiattichai says. “DHL has built a strong corporate culture and we stick to our company values and culture across every level of the organisation and in all the countries we operate in.
“For instance, the company believes in delivering ‘Result’ without compromising on ‘Respect’ and cultivating the mindset of continuous improvement as the way of working.
“Across different geographical markets, this has become the common guiding principle for everything we do, think and decide. The wealth of cultural diversity on a solid corporate cultural platform helps us differentiate ourselves from the others and stay ahead of the game.”
Kiattichai says that DHL is one of the most international companies in the world with more than 500,000 employees in over 220 countries and territories. Diversity is very important in DHL’s culture and it believes in leveraging diverse thoughts and cultures as its competitive advantage.
“At DHL, we practise "Head, Heart and Gut" leadership attributes. The concept advocates a balanced approach to leadership. Our people are our greatest asset and we believe in a diverse culture and a culture of ‘respect and results’ – i.e., we achieve results without compromising on respect,” he says.
“Logistics is essentially a service business and still fundamentally a people-based business despite significant developments made on the automation and digitalisation fronts. Managing logistics businesses successfully requires a cohesive plan that synchronises an organisation/people strategy with a business strategy.
“Southeast Asia in particular is a very large market with a very high degree of diversity, be it political, geographical, language, racial and cultural. We believe in diversity and inclusion as a competitive advantage. Countless studies support this statement, even directly linking organisational diversity and inclusion to higher profits.”
He adds that a Harvard Business School study found that multicultural networks encourage creativity of thought. As the Harvard Business Review points out, this kind of creativity is not only necessary in order to create a long-term competitive advantage but is also something that firms often struggle to achieve. Many other sources agree that innovation and creativity of thought are linked to competitive advantage as evidenced by increased profit, market share and sales.
DHL eCommerce is a division of Deutsche Post DHL Group (DPDHL), set up in 2014 in line with the growth of e-commerce. Thailand was the first new market entry for DHL eCommerce, where the company has built its own domestic delivery network with fully-owned operations.
Kiattichai started out in DHL as managing director of DHL eCommerce Thailand, building its domestic delivery network in Thailand to become the highly successful business it is today.
“Now, this has become a great case study for DPDHL Group as we have expanded into more markets. When we’ve expanded into Malaysia and Vietnam, I was asked to bring the same success to these new markets and became the MD for Southeast Asia,” he says.
He adds that today's business is changing at a much faster pace than ever before. In this digital era, retail businesses are being reconfigured with the emergence of e-commerce, enabled by Internet adoption and changes in consumer behaviour.
He says that logistics is a crucial element in the ecosystem and an integral part of e-commerce. As the new and exciting e-commerce market and the e-commerce logistics market are both in a high-growth stage, these markets are very open and competition is intense. This is increasingly driven by consumer expectations that have changed dramatically over the past decade.
“In the past, where the expected speed of delivery could be one to two weeks, this is now one to two days or even same day – which is why we launched our same-day delivery service recently to meet the consumer expectations for our customers. I believe it is important to stay close to our customers, understand their changing needs and to be agile and quick to respond to the needs of the market,” Kiattichai says.
As for the challenges in managing a logistic business, he says: “The e-commerce logistics industry today is more exciting rather than challenging. The most exciting part is how quickly the market changes and how the company remains agile and focused on achieving the best customer experience for customer’s customers.
“We do this by being extremely customer-centric and ensuring we provide a great delivery experience with greater choice, control and convenience for the end consumer.
“We are very upbeat about the growth prospects for e-commerce in Southeast Asia. 2018 has been an excellent year for us and we have seen very positive and encouraging growth in our volumes and customers.”
He adds that innovation is another area in which DHL is making a big push globally as the company leverages technology and digitisation to stay the market leader. This includes “small” innovation initiatives for productivity gains (e.g. automation and robotics) and “big” innovation ideas such as new business models.
“Our Innovation Centres in Singapore, Troisdorf in Germany and the upcoming one in Chicago in the US are fully focused on developing, testing and rolling out new innovations such as artificial intelligence and we will do this with customer input to ensure we always provide value to the customer,” he says.
Kiattichai says his most basic 101 logistics experience dates to the time he learnt about how to move cargo on containerised ships.
“Like many other shipping veterans, I subsequently ventured into a more complex logistics world with an excellent opportunity to develop a full suite of logistics set-up experience - including freight forwarding, warehousing and distribution, trucking, customs brokerage and supply chain management service, from scratch,” he says.
He adds that throughout his career, he has had opportunities to expose himself to the ways of running a business in an extremely mature, slow growth market as well as setting up a new business from the ground up.
This experience also encompasses entering a new market and managing the turnaround of a troubled business, along with managing businesses at different stages of the business life cycle. “All such challenges have proven to be a very valuable experience,” Kiattichai says.