Ralph 'Skip' Boyce
President
Boeing South-east Asia
THE concept of guan xi, or as literally translated in English, 'relationships', is synonymous with Chinese culture but certainly not limited to it. In the Chinese business world, guan xi refers to the network of relationships among various parties that provide support to each other.
Building relationships, especially with local partners, customers, suppliers and other stakeholders, is critical to the success of even the largest multinational companies like Boeing, particularly in our ever more-connected and interdependent global economy. Thinking 'global' but developing 'local' relationships in each country where we operate is critical.
This means much more than just hiring a few outstanding local employees to supplement the people sent out from the 'home base'. It's about truly understanding - and living within - the complex interactions of culture, tradition, history, peoples and politics, which create the unique characteristics of each society and each market within which we operate. The right guan xi minimises the risks and frustrations of doing business across multiple geographies and cultures, and ensures that as modern business leaders, we always have our finger on the 'pulse' wherever we operate.
This is especially important for a company like Boeing which partners a diverse range of customers, governments, suppliers and institutions the world over. In Singapore, Boeing has partnered with Singapore Airlines for over sixty years, and the Republic of Singapore Air Force since the nation's independence. These partnerships are just as vibrant today and have grown even stronger over the years.
Boeing is just one of more than 7,000 foreign multinationals and some 10,000 foreign-owned SMEs which have established regional operations in Singapore. The winning combination of a strategic geographical location, competitive workforce, strong business ecosystem, well-developed infrastructure and forward-looking economic policies have made it a natural home for foreign businesses operating across the region, while allowing them the opportunity to 'grow roots' and contribute to the development of Singapore itself.
Good relationships are also critical in helping Boeing and other multinational companies to withstand the current economic downturn. While the crisis has impacted Singapore and its neighbours, it has never threatened to quash the extraordinary entrepreneurial spirit and drive which is likely to make Asia the first region in the world to regain its economic momentum, ahead of the United States and the major economies in Europe.
This is not to downplay the effects of the current situation, which has created the worst operating conditions in memory for the world's airlines, even for industry icons like Singapore Airlines. According to the International Air Travel Association (IATA), airlines will lose about $13 billion in 2009; with Asian airlines among the hardest hit. This astonishing figure is nearly double the loss that IATA had initially predicted just three months earlier - testament to the shattering speed and scale of the financial tsunami sweeping across the industry. The inevitable consequence has been a sudden and precipitous drop in demand for new aircraft as carriers look to defer deliveries or worst still, cancel orders in a bid to match their capacity to current demand and limit further losses.
While the current economic outlook is grim, the relationships companies build with their customers, partners, suppliers, employees and other stakeholders within the local communities in which they operate are the key to both surviving such crises and emerging with their businesses intact. This is the key to building and developing business relationships which can withstand the most turbulent of periods and repay the investment in time and effort many times over.
