Leadership development in local enterprises will be critical for Singapore’s hub status
ON FEB 14, Finance Minister and Deputy Prime Minister Lawrence Wong delivered his 2023 Budget Day speech in Parliament, which focused on how Singapore can navigate the impact of the global economy.
The speech was significantly different from last year’s budget, which focused on digitalisation and strengthening capabilities amid the Covid pandemic – making it clear that while Singapore has safely exited the worst of the pandemic, attention is now on how Singaporeans can weather the immediate challenges of tighter financial conditions and higher energy prices.
Amid the most consequential geopolitical contest of our time, Singapore has managed to stay a steadfast and reliable partner to both the United States and China. We remain a reliable business hub as a financing, legal and logistics node for global businesses.
Covid further cements this reputation – throughout the pandemic, airports and seaports remained operational for essential supplies.
In fact, Prime Minister Lee Hsien Loong mentioned at the recent opening of Tuas port that we continue to move containers so efficiently and reliably amid the upheaval in global supply chains that we have made a name for ourselves as the “catch-up port” that shippers fall back on to resolve operational challenges.
Beyond being always open for business, a key part of the equation for us to remain relevant as a hub is the quality of our local enterprises, and their leaders.
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According to the Department of Statistics Singapore, fast-growth enterprises account for 71 per cent of employment and 44 per cent of nominal value-add to our economy in 2021. They play a key part in Singapore’s competitiveness both in the products and services they provide and the quality of the leaders they develop.
During the Budget, the government announced that it will boost the Singapore Global Enterprises initiative launched last year, with a S$1 billion injection to develop a healthy pipeline of companies with a strong track record of international success. Under this initiative, the government identified specialised capability building programmes tailored to individual corporate needs such as:
(i) Working with experts to strengthen core leadership teams;
(ii) Accelerating internationalisation plans; and
(iii) Building robust talent pipelines.
The focus on strengthening and building leadership teams and talent pipelines cannot be over-emphasised as today’s leaders, more than ever, are required to mobilise and lead diverse teams.
During Covid, we saw a hyperlocalisation of senior talents as borders closed and we needed “local boots on the ground” to “run the show”. This reality remains even after travel restrictions have been lifted.
In a 2021 study by Heidrick & Struggles, we found four key capabilities that stand out in building future-ready leaders in the post-pandemic era:
- Lead through influence
- Drive execution
- Create new thinking
- Have an ownership mindset
A key question comes to the fore: How do business leaders develop these capabilities to align and motivate talents with different cultural, professional backgrounds, and leadership styles?
Arguably, this leadership challenge is exacerbated in the fast-growth context.
In recent years, we have seen the startup scene flourish with an influx of entrepreneurs and founders using Singapore as a base to create their new ventures.
According to the latest SEA e-Conomy report by Google, Temasek and Bain, the region is set to reach US$200 billion in total transaction value over 2022, which marks a 20 per cent increase from 2021.
As Singapore matures as a venture capital hub and startups face a more difficult investor climate alongside mounting pressures to reach profitability, leaders of these fast-growth enterprises have a shorter runway to bring together a diverse team to perform and transform.
We see top teams of fast-growth enterprises derail because they fail at having a clear understanding of the kind of talent they need – not just the experiences and expertise required, but also how these talents collaborate with others – and how to organise themselves to achieve optimal performance.
Visionary leaders often have no problem attracting and forming a team of superstars but can fall short in driving disciplined execution of ideas and implementing a structure that lends itself to clear accountability yet supports collaboration.
It’s a delicate balancing act which requires these leaders to both retain their entrepreneurial zeal, but also recognise their own shortcomings in realising that vision, and that they have to depend on the team and structure more as their businesses scale.
Successful leaders display a high degree of agility, and are particularly adept in the way they learn, adapt, develop foresight and recover from setbacks.
So in building a company’s leadership bench, it’s important to assess and develop these competencies among employees.
The cost of making a wrong strategic hire at the top can have a detrimental impact on companies’ growth ambitions.
The most progressive companies do both of these well – strategically hiring and integrating top talents from the outside, but also steadfastly investing in growing their own timber from the inside.
With talent strategy being so important in making or breaking a company, it follows that the recently launched Singapore Global Executive Programme (SGEP) aims to support homegrown companies with a global presence in ramping up talent development in line with their growth ambitions.
Talent is the lifeblood of all growth businesses. Keeping a close tab on both the stock and flow of talent at all levels and tailoring how you support their development so that they are ready to take the next rung up should be an existential priority for businesses.
In a nutshell, for Singapore to continue thriving as a viable hub for businesses, we need to get our talent game right.
This involves not just having the best and most innovative companies investing and setting up operations here – which we have already been considerably successful in – but also ensuring our home-grown enterprises can attract, develop and retain their best leaders.
The writer is a partner in Heidrick & Struggles’ Singapore office and a member of Heidrick Consulting
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