IN TOUCH : Managers abroad

Frank Young, Vice President North Asia, The Lincoln Electric Company

What prompted you to seek work out of New Zealand?

High taxes and limited career prospects. This was during the time of the Muldoon government, the controlled economy, and marginal tax rates near 60 percent. All the disincentives to work and succeed caused an exodus of New Zealand talent and I was one of many. I took up position in Singapore in early 1979 working for US company to develop business in Asia. That green-field role was very challenging and an opportunity to learn and grow in much larger and more rewarding business environment than was available in New Zealand. I did not imagine then that I would be working overseas for 29 years and in so many different countries.

What is your current role?

Vice president, North Asia region based in Shanghai since early 2005. Working for
The Lincoln Electric Company of Cleveland, Ohio – the world’s largest welding products manufacturer. Responsible for the company’s business in Mainland China, Taiwan, Hong Kong, Korea, and Japan. The business includes three directly controlled manufacturing facilities in China employing over 1500, joint venture operations employing over 1600, and sales and distribution network throughout the region. New business development and integration of acquisitions are key strategic elements of the role.

How does it fit into your career path?

I took on this role for two key reasons. One was the interest of my wife and I to experience life in China at this exciting time. The other was that eventually most of us recognise what we are really best at although sometimes too late to influence career outcomes. I am most comfortable and effective working in situations of new business development or rebuilding of businesses where survival is in question. This allows me to use the best of my skills and experience learned as an expatriate manager.

What are its main challenges?

People – always the main challenge. Finding, training, and retaining the right people. Putting them in the right positions and the correct structure to allow them to perform at their best.
As the amount of foreign investment in China increases there is strong competition to hire good people with the ability to work in multinational company environment, with adequate language skills, and suitable qualifications and experience. That has led to rapidly escalating employment costs with employees switching jobs regularly, often for income increases of as much as 50 percent. The challenges this brings from an HR perspective are obvious. The Chinese have strong respect for education and personal development so well-developed employee training and development system is an extremely valuable retention tool.
The other big challenge in China is severe competition in all business sectors. Gross profit margins are typically around half of those expected in the western environment. This means even the smallest things matter so it is necessary to question and understand every part of the business process.

What are the learnings you will take from it?

The main lesson is get good legal and commercial advice from the right people. The powerful combination of abundant low cost labour and high technology in China today is unique historical phenomenon and will continue to fuel amazing growth rates for years to come.

How do you view New Zealand both as country and economic/business entity?

The clean, natural image of New Zealand is gaining increasing recognition worldwide. This is strong asset for New Zealand’s primary and tourism industries. I believe it is those industries that will underpin New Zealand’s future wealth and the prospects are excellent as global wealth increases but many parts of the world suffer increasingly from the effects of pollution and water shortages.

What sort of ongoing contribution can you/would you like to make to New Zealand’s economic/social welfare?

My main potential contribution relates to my career spent in the international business arena. When I return I would like to find means of sharing that in way that might help businesses or individuals succeed overseas.

What would encourage you to return?

Retirement eventually, or sufficiently interesting role in New Zealand where my international business experience can create value.

What is the most useful piece of advice you could give young executives who are contemplating career stretch offshore?

While I thoroughly recommend working overseas, it is advisable to have plan to return within three years. If you plan to work overseas for longer, you should consider it long-term career as you will become unemployable back home.

Frank Young is member of KEA, New Zealand’s global talent community, www.keanewzealand.com

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