Singapore: Looking Ahead

Singapore’s 50th anniversary is an ideal time for us to reflect on lessons learned and to look to the future. Singapore has come a long way in the past five decades, transforming itself from a third-world country to a first-world nation and regional hub of commerce, finance, technology, transportation and talent. This dramatic evolution was largely driven by the leadership of a generation of pioneers who had the vision for a better future and the pragmatism to create it. These leaders challenged and ultimately changed the status quo through innovation and risk-taking, while remaining humble enough to seek guidance when necessary. These efforts not only redefined a nation, but also had a profound impact on the organizations operating here, enabling and nurturing both local and expatriate leaders. Singapore’s success reaches beyond its borders: The World Economic Forum ranked the country as the second-most competitive economy in the world in its 2014-2015 report and INSEAD ranked the country number two in its 2014 Global Talent Competitiveness Index.

It can be tempting to simply enjoy Singapore’s standing and continue the current course. However, it is unwise to expect that the same efforts and capabilities that brought the country to this point will be enough to ensure our future success.

Paradoxically, the desire to maintain the new status quo of stability, prosperity and global recognition could at the very least erode it and in the extreme, even lead to an eventual decline toward mediocrity. Years of exceptionalism and growth have lulled many Singaporeans into complacency and risk aversion, which the country cannot afford if we are to compete and succeed on a global level where the bar continues to rise. For example, while Singapore is at or near the top across various global education rankings, how many Nobel Prize-worthy scientific breakthroughs have we achieved? Singapore boasts strong regional brands, but how many Singaporean companies are truly global? Numerous Singaporean senior executives have led and transformed government-linked organizations of global scale, yet how many Singapore-born leaders have reached the upper echelons of multinational corporations (MNCs)? It might be sobering and instructive to compare Singapore to Israel given the latter’s similarly sized population and arguably more severe geopolitical challenges. Since the turn of the century, Israel’s premier university, Technion, has produced more Nobel Prize recipients than Harvard University. Israeli companies like Akamai, Checkpoint Software and Teva Pharmaceuticals have become global champions. Similarly, Israel-born executives have reached the C-level of global companies like Oracle, Bain & Company and Gilat Satellite Networks.

How can Singapore as a nation capitalize on its success as a regional player to become a game-changing global leader? This goal may not be as far-fetched as it may sound. Singapore is the Asian epicenter of the bulk of technology-related MNCs, while many Southeast Asian startups, e.g., GrabTaxi, are based here, paving the way for the country to become a worldwide technology hub. In addition, the Singaporean government identified five “growth clusters” in its 2015 budget: advanced manufacturing, logistics and aerospace, applied health sciences, smart and sustainable urban solutions, and Asian and global financial services. However, growth opportunities within the country are limited. Organizations will need to expand into other regions if they are to successfully compete in the long term. Singaporean senior executives and organizations will also need to increase their risk appetite if our country is to become a launching pad for innovative companies that can succeed on a global stage. Spencer Stuart spoke with a range of Singaporean leaders to discuss what learnings from the past can be applied to the future and most importantly, what new skills, capabilities and mindsets will be needed to ensure Singapore’s success over the next 50 years and beyond.

Lessons learned from the leaders of Singapore’s evolution

Singapore’s reinvention was engineered by a generation of leaders motivated and united by a singular purpose: to draw their country out of poverty and build a strong, prosperous and vibrant nation. “While ‘purpose’ is a common buzzword, I truly believe that the tremendous sense of purpose of nation-building was the key success factor for Singapore,” said Piyush Gupta, CEO of DBS Banking Group. “Lots of countries have short bursts of purpose, but then it disappears. In Singapore’s case, it has been consistent for 50 years.”

Vision and foresight enabled the early leaders to transform the country and lay the foundation for future success, evidenced by achievements spanning the creation of Jurong Island, the establishment of the “World’s Best Airport” and formation of a petrochemical and financial services hub. Creating a metropolis from a veritable blank slate also required humility and a willingness to accept outside guidance, according to Lee Suet Fern, managing partner at Morgan Lewis, Singapore. “We received considerable advice from economist Albert Winsemius, even when it was sometimes contrary to the thinking of our founding prime minister, who was open to outside-in perspectives,” she said. In the private sector, a culture where the best ideas win out over long-held perspectives was inspired by the meritocracy of Singapore, observed Tang Kin Fei, group president and CEO of Sembcorp. In an environment with an uncharted path, a willingness to take risks was vital.

Another cornerstone of Singapore’s evolution has been our investment in and dedication to world-class education. Today, the country tops the OECD’s global education rankings, an accomplishment decades in the making. “There was very early recognition of the significant value in educating our people,” said Euleen Goh, board member at Royal Dutch Shell, among others. “Singapore was also an early mover on female education.” Koh Boon Hwee, chairman of Credence Capital, likens the educational approach to leadership development programs at global companies. “There is a remarkable ability through our public sector scholarship system to build the best leaders and ensure they have a career path that keeps them growing just like at an MNC,” he said. “We put all those processes in place consciously.”

The enormity of building a nation also demanded collaboration, a principle often touted by founding Prime Minister Lee Kuan Yew and embraced by Singaporeans, evidenced by their spirit of shared ownership of the country, its schools and healthcare system. According to Goh, underpinning the success of these systems is a strong results orientation. This willingness to collaborate, combined with a proven ability to drive operational efficiency and profitability, has allowed Singapore to transform into a more sophisticated and increasingly global economy.

Risk-taking, cross-cultural collaboration and adaptability needed for the next phase of Singapore’s transformation

Singapore’s evolution into a knowledge-based economy has presented it with growing opportunities in the high technology, services and creative industries. Despite the growing level of activity in industries such as technology and financial services, opportunities for expansion within the country are limited, noted Tang. Thus, Singaporean organizations will need to expand into other geographies in order to continue on their growth trajectory — and will likely need a new type of talent to do so. Additionally, the complacency and risk avoidance engendered by Singapore’s hard-won stability and prosperity could risk the nation’s future standing if leaders are not vigilant. To combat these detrimental forces and succeed in an increasingly competitive global landscape, organizations will need to call upon leaders with a new mix of skills and mindsets.

A sense of drive and ambition

It can be tempting to forget the sense of literal and metaphorical hunger that elevated the country to the first world. While basic survival is no longer the challenge, leaders nonetheless need a renewed determination and an understanding that the country’s prosperity is not self-sustaining. The struggles of companies that were once industry leaders as well as nations in economic turmoil should serve as cautionary tales of how quickly both organizations and countries can decline. Leaders need to recognize this threat and help their teams understand the high stakes, even in times of success. Despite Singapore’s ascension, the market’s small size limits long-term growth. “For Singaporeans to win in the future, they have to go overseas,” said Tang. “For that, they need hunger.”

Willingness to take risks and a dedication to innovation

Singapore’s now heightened status quo can deter risk-tasking, and may stifle innovation in the process. In fact, in its 2014-2015 The Global Competitiveness Report, the World Economic Forum named “insufficient capacity to innovate” as one of the biggest barriers to doing business in the country. While investing more in research and development can help — and Singapore is becoming an R&D hub for regional companies and MNCs — it is only part of the solution. Innovation is the result of specific leadership capabilities and mindsets, and can either be fostered or stifled by organizational culture. “Taking risks was something Singapore’s leaders did in the past and it is starting to dissipate,” said Gupta. “We need to have the courage to be different, to fail and learn from it and to take a chance as a leader,” added Goh. “This is a departure from the past’s emphasis on discipline, order and the overall team.” Leaders may need to challenge old paradigms in order to tap new sources of innovation. “Are bosses willing to listen to subordinates?” posited Tang. He has observed that the younger generation is much more willing to challenge ideas than the previous one and that leaders at the top of organizations today need to provide the right environment to encourage debate and welcome dissenting opinions.

Increased risk tolerance will require a shift in mindset. Gupta recommended “making heroes of failures” and revamping the incentive structure in both the private and public sectors to help remove the negative stigma around failure and, ultimately, encourage innovation. The presence of a greater variety of business models can also inspire other organizations to rethink their approach to risk. “More private entrepreneurships will be critical in paving the way for building a greater risk appetite across sectors,” he said.

Collaboration and engagement across cultures and diverse stakeholders

Nearly every leader we interviewed listed the ability to work across cultures as a must-have as Singaporean companies expand into other geographies and collaborate in a diverse workforce with high numbers of expatriates. Similarly, in an increasingly transparent world, senior leaders must also be able to interact with and influence a range of stakeholders, from customers to their own teams. “The world is now so open and borderless,” observed Kwa Chong Seng, chairman of Neptune Orient Lines and Singapore Technologies Engineering. “It is going to be critical for leaders of tomorrow to be able to engage and influence their stakeholders.”

Adaptability

A world with a rapid pace of change and ever-rising customer expectations requires highly adaptable leaders. Kwa noted that leaders must learn to manage and accept change or risk obsolescence. The competitive bar is rising and leaders will need an openness to continual learning. Adaptability will also be vital as more Singaporean organizations expand into other markets where the competitive landscape and business practices are different.

Broader business perspective

Leaders will be required to take a holistic view of the global business landscape, and be equipped with a wider set of skills from operations to strategy. In addition, they will need to view the business through local, regional and global lenses without losing sight of commercial results and the roles of their people and culture in their ultimate success. Dr. Beh Swan Gin, chairman of the Singapore Economic Development Board, noted, “We are moving from an economy where we were adding value to one where we are creating value. In the next 10 to 40 years, leaders of Singapore-based businesses have to contend with a much more crowded competitor space. Creating billion-dollar businesses will require both a good grasp of technology as well as a deep understanding of markets and consumers.”

Creating leaders for the future

The nature vs. nurture debate is an ongoing one when it comes to developing the country’s talent. A desire to lead and some qualities, such as charisma, are more innate. However, most of the leaders we spoke with agreed that development and coaching can make a significant impact even absent certain intrinsic capabilities. “I think that some people are natural-born leaders — they have the charisma, the standing and the persona that people want to follow,” said Goh. “Then there are those who learn their leadership skills from experience, not books. The ability to influence an audience to engage others and build teams can be learned. The world needs a whole lot more than natural-born leaders. The best leaders are ones who leverage their individual strengths and are genuine.”

Many Singaporean leaders will attest to the power of firsthand learning experiences in expanding and sharpening their own skill-sets. “Nurture is more important than nature,” said Kwa. “I’m a direct example of that. I spent more than 40 years in an American company, so I learned to compete and be more proactive and became a very different person from who I was when I graduated from college. But nature plays a definite part. For example, I am more intuitive by nature. But we are always learning — school, university and mentors all shape our competencies as leaders. I believe strongly in on-the-job development of talent and leaders.”

Currently, the best and brightest Singapore students are systematically harvested during high school, sent to the most prestigious institutions and groomed for leadership positions in the public service. Recruitment into these well-defined career paths in the public sector can prevent talent from pursuing other more entrepreneurial roles and, as a result, may inhibit innovation. In order to remain competitive in a global economy, Singapore will need to build a similarly strong pipeline of talent for the private sector.

According to Tang, Sembcorp’s talent development roadmap seeks to accelerate the development of its top leaders and ensures that executives reach their potential quickly. Lee echoed the sentiment: “The structures that are built around leaders make them successful.” Singaporean organizations need to create clear talent development plans. Successful talent development plans also hinge upon understanding the different motivations of each generation of leaders. Tang noted that the previous generation was driven by the need for survival but going forward, leaders will need to be motivated by the welfare of their family units. Others have observed that up-and-coming executives want to work in organizations where they can be heard and contribute in meaningful ways, requiring senior leaders and organizational cultures that are open and flexible.

What Western and Singaporean leaders can learn from each other

Singapore has long been a hub for MNCs looking to establish a presence in Asia and a top destination for expatriates from around the world. The country’s long history of working with companies from other countries, especially Western-based organizations, have provided an opportunity for Singaporean and Western leaders to learn lessons from each other:

Honoring the past while looking forward: What got us here won’t get us there

Singapore has much to celebrate upon its 50th anniversary. The generation of nation builders highlighted the importance of a strong sense of purpose, vision, collaboration and dedication to education. But just as the country has evolved, so must its leaders. Complacency and hubris are among the biggest threats Singapore faces. Whether the next chapter of Singapore’s story is one of success or decline depends on organizations and senior leaders who are willing to adopt the skills and capabilities necessary to compete in the decades to come.