Leadership Traits Required to Succeed in Frontier Markets
Not a lot of research has been done on what makes leaders succeed in Frontier Markets. Obviously they should be able to excel in the ‘generic’ leadership competencies as identified by Ulrich. However, based on my experience over the past 17 years in operating in frontier markets I think these are not enough. I have distilled 6 additional traits that makes the difference between leaders that flourish in frontier markets versus those who fail.
First of all a leader in frontier markets has to be adaptable. A key characteristic of these markets is the environment is so fluid that what makes sense today, does not have to make sense tomorrow – everyday is different. Leaders need to be agile, anticipate and adapt to different circumstances. Government policies change regularly, security situations can cause lack of access to large swaths of customers in the blink of an eye and currency fluctuations can render your imported goods inventory worthless in weeks.
Most things in Frontier Markets happen not because of what you can do but from who you know. Getting things done is more personality driven rather than process or systems driven. Getting clearance to import products is linked to who you know, resolving a catastrophic new regulations is linked to who you know, getting the right talent in the organisation is linked to who you know, getting licenses is linked to who you know. You must have the right contacts and keep developing your network.
3. Street Smart
Leaders that keep their their heads in the clouds won’t succeed in frontier markets. You must understand how things work at an operational and basic level. You have to understand the lives and concerns of your employees, customers and suppliers to be able to get the best out of them. Conceptual frameworks don’t work. Even if you have one you can only succeed if you translate them to meaningful information for individuals. In China I learned that you can get agreements on concepts within minutes but agreements on how to implement takes days because this is where the ‘rubber hits the road’ for people. This is the step where they understand how the project will work and how it will affect them. The psyche of the people that you’re working with will dictate how you proceed with your work and ultimately your success.
People get excited and engage if you can paint an exciting and enticing picture of the future you want to create. One of the characteristics of frontier markets is that everything is possible (this is different from that everything is easy!). Leaders who understand this have the ability to imagine a bold future and are able to translate how to get there. They’re the ones who are truly able to capture the growth potential that frontier markets offer.
5. Taking and Hedging Risks
Huge growth requires you to be able to take large risks, understand the potential pitfalls and take measures to hedge your bets. A number of years ago a Pharma company in China took risks to significantly expand their sales force and move into secondary and tertiary cities, cities were no other multinational companies had gone before. Their bet paid off and they became the #1 international pharma company. During the same time while I was at Walls China in the 90’s, Wall’s wanted to expand its distribution and decided to place hundreds of thousands of ice cream freezers across the country. They lost track of the freezers which disappeared causing the company to lose millions of dollars in the process. You have to be willing to take the risks and accept that there may be consequences to pay.
6. Will Power
Whether you call it will power, perseverance or grit you need a huge dose of it to succeed in frontier markets. They will test your will power to the limit. As much as everything is possible, everything can go wrong. In order for you to stay the course you have to be obsessed, intense and willing to sacrifice other things in order to make it work. Working in frontier markets is not for the faint hearted, succeeding in frontier markets is only for the strong willed.
Anyone else have any other characteristics which you think can make or break a leader in frontier markets? Would love to hear your stories about who succeeds and who fails in this incredibly fascinating region.