Thai­land’s Aero­space Sec­tor is Open for Busi­ness – But Don’t For­get the Soft Skills!

Thai-American Business (T-AB) Magazine - - Contents - Writ­ten by: Al Valen­tine

The aero­space in­dus­try in Thai­land is gear­ing up for take- off and the savvi­est of busi­ness­men, en­trepreneurs, and in­vestors should give crit­i­cal thought to their en­try into this mar­ket by not only be­ing con­cerned with the hard skills rel­e­vant to aero­space, but should give just as much at­ten­tion and con­sid­er­a­tion to the softer side of aero­space: the peo­ple.

THE GOV­ERN­MENT’S PLAN

Within ASEAN, Thai­land is known as the hub for man­u­fac­tur­ing mo­tor ve­hi­cles and com­po­nents. In fact, the au­to­mo­tive in­dus­try ac­counted for over 40 per­cent of Thai­land’s for­eign di­rect in­vest­ment ( FDI) from 2009 to 2013. What has led the likes of Toy­ota, Mit­subishi, Nis­san, Honda, Ford, BMW, and oth­ers to Thai­land? An­swer: the sup­port the Royal Thai Gov­ern­ment ( RTG) gives to these kinds of in­vest­ments, along with a rel­a­tively low- cost but skilled work­force. So, to com­pli­ment the auto in­dus­try, can Thai­land add to its port­fo­lio of strate­gic in­vest­ments by de­vel­op­ing the aero­space in­dus­try? If so, what do you need to know and do in or­der to be one step ahead of the game?

The aero­space in­dus­try al­ready has representation in Thai­land via the likes of Honey­well, Gen­eral Elec­tric, Air­bus, Tri­umph Group Inc., along with tire man­u­fac­tur­ers Goodyear, Con­ti­nen­tal, Miche­lin, and Leistritz. In fact, ac­cord­ing to the Board of In­vest­ment ( BOI), there are over 20 com­pa­nies ac­tively in­volved in air­craft part man­u­fac­tur­ing and close to a dozen com­pa­nies per­form­ing var­i­ous maintenance and re­pair on air­craft and air­craft parts. How­ever, can it ex­pand?

Un­der a new ini­tia­tive called the “New S- Curve,” the RTG’S BOI an­nounced that ten in­dus­tries will make up what will be known as its “New En­gines of Growth”. Un­der this RTG- backed ini­tia­tive, the pro­gram will in­cor­po­rate eco­nomic pol­icy re­forms, in­vest­ment in­cen­tives, and pro­mo­tional pack­ages. Aero­space fits promi­nently in that plan.

One ini­tia­tive is the Aero­space In­dus­trial Es­tate De­vel­op­ment Plan ( 2016- 2045), which will take place at U- Ta­pao- Pat­taya in­ter­na­tional Airport and is cur­rently be­ing ex­e­cuted in three phases: ( 1) Aero­space In­dus­trial Es­tate be­ing de­vel­oped; ( 2) Orig­i­nal Equip­ment Man­u­fac­tur­ers be­ing in­vited to build fa­cil­i­tates; and the de­vel­op­ment of a ( 3) Maintenance Re­pair and Over­haul sec­tor.

Un­der this ini­tia­tive the present fo­cus is on ser­vic­ing air­frames, en­gines and their com­po­nents. The top five com­po­nents ex­pected to bring in the most cap­i­tal in Thai­land are as fol­lows: Land­ing gear, wheels and brakes; Aux­il­iary Power Units ( APUS); In- flight en­ter­tain­ment ( IFE) com­po­nents; En­gine Fuel and Con­trol; and Avion­ics. Ad­di­tion­ally, el­i­gi­bil­ity ex­ists for what is called ‘ Su­per Clus­ter in­cen­tives’ for en­ti­ties that co­op­er­ate with aca­demic or re­search in­sti­tu­tions or the Cen­ter of Ex­cel­lence ( COE) in the clus­ter area.

STRATE­GIC THINK­ING RE­QUIRES STRATE­GIC PLAN­NING & STRATE­GIC EX­E­CU­TION

A key ques­tion is, can Thai­land de­velop the aero­space in­dus­try as they did with the auto in­dus­try and what can en­trants learn from the ex­pe­ri­ences of the auto man­u­fac­tur­ers? Whether think­ing of Porter’s “Five Forces,” Jay Gal­breth’s Star Modeltm, Mckinsey’s 7S or con­duct­ing SWOT/ SOAR analy­ses, or a PESTEL anal­y­sis, en­trants into the aero­space in­dus­try have a unique and im­por­tant fac­tor to con­sider when es­tab­lish­ing op­er­a­tions.

When look­ing through the lens of fo­cal sys­tems, this re­quires strate­gic thought and plan­ning from the mega sys­tems per­spec­tive ( Thai­land as a coun­try via the RTG) and from the macro per­spec­tive, which means the var­i­ous com­pa­nies who will take the op­por­tu­nity and in­vest in Thai­land’s emerg­ing aero­space in­dus­try.

So what should po­ten­tial in­vestors/ op­er­a­tors do in or­der to re­duce their risk and build a foun­da­tion that could lead them to decades of su­pe­rior per­for­mance as has hap­pened in the auto in­dus­try?

THE SOFT STUFF MAT­TERS!

The auto in­dus­try proved that a sys­tem­atic ap­proach to or­ga­ni­za­tion de­vel­op­ment ( OD) could be em­braced with par­tic­u­lar em­pha­sis given to the softer side of op­er­a­tions: the soft skills or peo­ple fit­ting this into the de­sign of their pro­cesses.

In the aero­space in­dus­try, or­ga­ni­za­tional health is paramount and is re­peat­edly borne out by lead­ers’ tes­ti­monies. Larry Bos­sidy, former chair­man and CEO of Honey­well and Al­lied Sig­nal, com­ments that, “The soft stuff – peo­ple’s be­liefs and be­hav­iors – is at least as im­por­tant as the hard stuff. Mak­ing changes in strat­egy or struc­ture by it­self takes a com­pany only so far.” Former chair­man and CEO of Pep­sico, Roger En­rico, suc­cinctly put it, “The soft stuff is al­ways harder than the hard stuff.”

When speak­ing of soft skills, it is vi­tally im­por­tant to talk about lim­it­ing be­liefs. As quoted in Be­yond Per­for­mance: How Great Or­ga­ni­za­tions Build Ul­ti­mate Com­pet­i­tive Ad­van­tage, Pierre Beau­doin, Pres­i­dent & CEO of Bom­bardier talks about the im­por­tance of be­liefs stat­ing: “The re­sults of the as­sess­ment re­vealed a shortlist of lim­it­ing be­liefs that af­fected the value placed on in­di­vid­u­als, the role of team­work, the ef­forts of con­tin­u­ous im­prove­ment, and the drive for re­sults.”

Why is this im­por­tant? Or­ga­ni­za­tions op­er­at­ing in the aero­space/ avi­a­tion in­dus­try are cat­e­go­rized as High- Re­li­a­bil­ity Or­ga­ni­za­tions ( HROS). HROS are or­ga­ni­za­tions that if ( when) in­ci­dents oc­cur their neg­a­tive ef­fects are cat­a­strophic - peo­ple die. Ex­am­ples of other HROS are off­shore oil­rig op­er­a­tions, nu­clear power plant op­er­a­tions, and hos­pi­tals/ health­care in­sti­tu­tions, just to name a few. A key el­e­ment to­wards de­sign­ing and op­er­at­ing an HRO is giv­ing crit­i­cal thought to the re­duc­tion of non- tech­ni­cal or hu­man error/ hu­man fac­tors fail­ures.

Af­ter in­ci­dents such as the Tener­ife airport crash, the Space Shut­tle Chal­lenger ex­plo­sion, and the Deep Wa­ter Hori­zon drilling rig ex­plo­sion, an anal­y­sis of these events sug­gested fail­ures in lead­er­ship, poor team co­or­di­na­tion, com­mu­ni­ca­tions break­downs, a lack of as­sertive­ness, inat­ten­tion, in­ad­e­quate decision- mak­ing and per­sonal lim­i­ta­tions were to blame for these in­ci­dents oc­cur­ring.

In­com­ing or­ga­ni­za­tions should give ex­tra con­sid­er­a­tion to em­brac­ing OE pro­grams that fo­cus on talent de­vel­op­ment. Pro­grams with a sys­tem­atic fo­cus cen­tered on men­tor­ing- coach­ing- train­ing that in­flu­ences or­ga­ni­za­tional cul­ture shift changes through the use of con­tin­u­ous process im­prove­ment of core non- tech­ni­cal skills ( NTS) should be con­sid­ered.

De­vel­op­ing such sys­tems and pro­cesses will help to raise the aware­ness of im­por­tant NTSS and hu­man per­for­mance ( hu­man fac­tors) of lo­cal work­ers at all lev­els of the or­ga­ni­za­tion. In­sti­tu­tion­al­iz­ing such sys­tems and pro­cesses will high­light and raise sit­u­a­tional aware­ness, con­cen­tra­tion on prob­lem- solv­ing and de­ci­sion­mak­ing, but above all it is con­gru­ent to and in­valu­able for de­vel­op­ing ro­bust and sus­tain­able OE pro­grams, mid­dle man­agers, and or­ga­ni­za­tional lead­ers.

CON­CLU­SION

Growth in aero­space is all about giv­ing em­pha­sis to both the hard- and soft- skill re­lated tasks. Ad­di­tion­ally, it is about al­low­ing the sys­tems, pro­cesses, pro­ce­dures, struc­ture, and much more to sup­port your or­ga­ni­za­tion in pur­suit of op­er­a­tional ex­cel­lence.

Al Valen­tine is a cer­ti­fied mas­ter coach, mas­ter prac­ti­tioner of OD, and Ph. D. can­di­date with ex­per­tise in lead­er­ship, strat­egy, cross- cul­tural com­mu­ni­ca­tions, and more. He can be con­tacted at al@mj­jen­ter­prises.org.

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