I recently had the pleasure of attending Mr. Harald Link’s (Chairman of the B. Grimm Group) keynotes speech on “How to Do Sustainable Business in Thailand” during the Annual Ordinary General Meeting of the German Thai Chamber of Commerce in Bangkok, on March 13, 2014.
Mr. Link’s view on cross-cultural leadership effectiveness and particularly the importance of compassion and happiness for doing business successfully truly impressed me. I believe our world needs more such leaders, and I feel honored that Harald Link gave me permission to publish his his notes for his speech on this blog.
Enjoy the read, spread the word, and do better business with compassion and happiness!
Your Excellency, honored hosts,
It is a great pleasure and honor to be speaking to you this evening representing B. Grimm, one of the founding members of the German Thai Chamber of Commerce.
The subject is
How to Do Sustainable Business in Thailand
I wish I knew for sure…
Along the way of my 36 years in this beautiful country I met with too many surprises, so my thoughts can only be guesses along the line of my late uncle: “the longer I live here the less I think I really know.”
Someone said that the two most important days in your life are the day you were born and the day your find out why.
John Lennon’s mother apparently said to him that the secret to life lies in happiness. So when he was asked in school to write about what he wanted to be, he wrote “happy”.
The Dalai Lama is known for saying that “If you want other people to be happy, practice compassion. If you want to be happy, practice compassion”.
So does happiness and compassion play a role in the longevity of a company?
What about longevity of companies around the world?
There seem to be about 40 companies from the age of 700 to about 1,300 years old. The very oldest dating from 578 just disappeared over too much debt. Another 105 companies date back 614 to 714 years.
Is there a pattern to be noticed in that age group?
- 1/3 were in the tea/sake/beer/wine business (the oldest European company from 1,000 is Chateau de Goulain)
- 1/3 in the restaurant/pub/hotel business
- 1/3 in others among them pharmacies and confectionery
In an analysis of the oldest just collapsed business it was said that the reason for their longevity was a stable business sector, i.e. building of temples and keeping it in the family with only a capable family member to be selected for succession. The reason for their downfall was property speculation with debt. The company lasted for 40 generations.
In Japan, there are over 20,000 companies over 100 years old. They are called Shinise in Japanese. Prof. Makoto Kanda, who has been studying them for decades, says they survive because they are small, mainly family run and focus on a central belief that is not tied solely to making profit. Most important factors for survival are emphasis on innovation , reinvention, and separate what you do, from how you do it (see also “Built to Last” by Jim Collins), unity and trust within the family (if it is a family company) or primo genitur or one successor.
Yale lecturer Richard Foster, studying firms over 100 years, claims they have continuous principles, and ideas plus long term community relations.
To summarize [the key elements for sustainable business]:
(1) Stable business [sector] (e.g. Berkshire), innovation (Siemens, Merck), reinvention (Nokia)
(2) Separation what you do from how you do it
(3) Central belief not tied to profit making, long term community relationship
(4) Good succession planning
Maybe they left out three other very important aspects:
- Leaders who select the right people
And there is no mentioning of happiness in the company or compassion!
There seem to be quite a number of differences between Northern European [culture] and Thai culture, and I would like to look at them in the context of the above and our subject of sustainability in Thailand:
- “The Mind of East Asia” by Lily Abeg (“Ostasien denkt anders”)
- Greek vs Chinese (pacta non sunt servanda, circumstances change)
[remark Gerrit Pelzer: in Western business culture an agreement that once was made must be kept, no matter what. The Western business man/woman may find themselves surprised when their Asian counterparts appraoch them for chnaging a contract when outer circumstances have changed.]
- Holistic view
- Heart vs head khawjai (verstehen), dii jai, jay yen/jay roon – cool head/hot headed
[The Thai word for “to understand” is “เข้าใจ” [khawjai] literarily “to enter the heart”. Interestingly the German translation is “verstehen” from “Verstand”, in English e.g. reason or intellect. Thai vocabulary is full of combinations with the word “ใจ” [jai], “heart”. Conflicts between cultures may very well be represented by conflicts between head and heart. ]
- Climate, Chinese immigrants
- Patronage System, Relationships vs Principals, Institutions
[It is said that in Thailand who you know matters more than what you know. Whereas Western business people typically attend conferences and seminars to learn something new, Thai people may attend to get to know someone.]
- Barami, Krengjai, relationship in the company
[“Krengjai” (เกรงใจ) is one of the most important values in Thai culture. However, there is no English translation for it. Krengjai is basically an attitude whereby an individual tries to restrain his own interest or desire. It often leads to massive misunderstandings and conflicts between foreigners and Thais in business contexts.]
- Buddhism: rebirth, dharma, cause and effect, forgiveness
- Christianity and rebirth
- Lack of state income: social contributions
- Legal system and lies
- Threats and bonuses
- People remember how you make them feel, smile
- Smile : accident, admonishment, embarrassment
[There is good reason why Thailand is known as the Land of Smiles. Thais seem to smile at almost any occasion, even in situations when a foreigner would find it inappropriate. A smile in Thailand does not always have the same meaning as in the West. Thais often complain that foreigners misunderstand (!) a “yes” or a smile.]
Recommendations for doing Sustainable Business in Thailand:
(1) Strive for happiness for yourself and others
(2) Stable business context, innovation, and adapt good succession plan
(3) Doing good for society and let your stakeholders participate when doing it
(4) Listen emphatically, (Thais think differently, Krengjai, barami, change of circumstances, lack of principles)
(5) Holistic approach: understand that everything that has an impact on or associate life is also important for you
(6) Have advisors or staff with connection to help you in trouble and establish relationships.
(7) Try to enjoy the journey, it [Thailand] is one of the more enjoyable countries in the world.
Born in Germany, Mr. Harald Link has been a Managing Partner of B. Grimm & Co. ROP since 1987. He has been the Chairman of B. Grimm Group of Companies since 1987, and serves as Chairman, Vice Chairman, and Director of various corporations in Thailand. Mr. Link majored in Finance & Accounting, and holds an MBA Degree from St. Gallen University, Switzerland.