She's head of South-East Asia's largest telecoms firm, with 23,400 staff, a market capitalisation of more than US$41 billion, and some 185 million customers spread across 20 countries. She's been listed by Fortune Magazine as one of the world's most powerful women in business. And yet, Chua Sock Koong, the chief executive officer (CEO) of Singapore’s SingTel Group, is hardly a household corporate name in the Asia Pacific.
To the extent that one employee of Australia's second biggest telco, Optus, owned by SingTel, confessed that until recently, he wasn't even sure of the CEO's gender: "You see a few e-mails go round each year signed by her, but to be honest I had no idea she was a woman. Certainly no one makes a big deal about it." Least of all Chua.
"In SingTel, you see a fair number of women are in leadership positions, including a number of listed companies, so I'm not an exception here," she says. "I don't think this is where gender makes a real difference. I think as a group, SingTel has been totally gender neutral."
In a rare interview, Chua sits down with Fairfax Business Media to talk about her approach to leadership and the challenges of managing in a recession.
The child of migrants from southern China who settled in Singapore, Chua's father ran a small haberdashery shop and her mother stayed home to raise five children. As a first-generation Singaporean and the first in her family to go to university, her parents were understandably chuffed.
Chua qualifies that while her mother is proud, "in the end, I think I'm still a daughter to her. The focus [in my family] was to make sure the children were taught the right value system and that is more important to her than being rich or successful." That traditional Chinese background helps keep her grounded amid the jostling for position in the global telco sector.
Ascending the corporate ladder might not have been high on her family's radar, but Chua has nevertheless risen to become one of Singapore's most senior business women, with a take home pay for the last fiscal year of S$3.6 million (US$2.4 million).
Role reversal
In a neat role reversal, Chua's husband, a retired banker, stays home. The couple has two girls: one about to enter the workforce, while the other has just started university. And Chua is a self-described high-frequency ‘texter’, ‘phoner’ and ‘e-mailer’, admitting she never likes to turn the phone off. "I carry my BlackBerry everywhere," she confesses. "When I read it at home, my husband gets very cross."
Meanwhile, Chua's youngest daughter is turning the technology tables on her mother. Chua spends about half her time travelling. But she likes to drive her daughter to college in the mornings when she is home. She has a rule of no texting in the car. That is sacred family bonding time. Does her daughter adhere by the rule? "She can text without looking at the keys ... Of course not!" she laughs.
A 20-year veteran at SingTel, Chua has trod the finance path from treasurer to chief financial officer to CEO. Since she took the top position at SingTel on 1 April 2007, Chua has led the group to post a record revenue of $S14.84 billion (US$9.8 billion) for the year ended 31 March 2008, and overseen SingTel take a 30 per cent stake in Warid Telecom, Pakistan.
However, the group has since suffered a dent due to the economic downturn: net profit fell 16.1 per cent for the third quarter (the three months to December 31 last year), compared with the previous year. SingTel maintains currency depreciation played a role and that its performance in Singapore and Australia was strong, whereas its regional mobile associates in Indonesia, the Philippines and Pakistan were weaker.
Prior to taking the top job, Chua was deputy group CEO from October 2006 and served as chief financial officer (CFO) from 1999. That focus on strong financial discipline has carried through her leadership. But she has also proved adept in executing acquisitions. It was during her role as CFO that SingTel made the bulk of its overseas acquisitions, including Optus in 2001. The group also has substantial investments in Pacific Bangladesh Telecom (45 per cent), the Bharti Telecom Group in India (30.4 per cent) and Telkomsel in Indonesia (35 per cent).
And even in theses more constrained times, Chua doesn't rule out new acquisitions. The group is still looking to pick up good buys in Asia. Almost 40 per cent of the company's revenue comes from mobile communications, followed by data and Internet services at 20.8 per cent, national telephone (12.7 per cent) and IT and engineering (9.9 per cent). SingTel is also pushing its IT solutions division to comprise about 50 per cent of its business as it steps up from being just a network provider.
"Our aspiration and vision is to be the leading telecommunications company in Asia," she asserts. "Our focus is making sure the assets we already own—the businesses in Singapore, in Australia, and the regional associates we have—perform well. We've been very focused on execution: making sure we transition out of the high dependency on plain carriage business to higher value-added businesses. Particularly in this very difficult time, there's a high focus on making sure we extract full value from the investments already made."
Singapore Inc
Chua's career developed against the backdrop of profound changes in Singapore over the past four decades. When she grew up, Singapore was "a poor country, still trying to find its feet" after gaining independence in 1965. She describes her background as far from lavish, adding hardly anyone had any money so there was little sense of deprivation. She was nevertheless schooled at the country's leading Raffles Girls' School and later the Raffles Institution. She holds a bachelor of accountancy degree from a Singapore university.
It was the need for all hands on deck in the 1970s that kick-started Chua's working life. Singapore was in no position to "do without 50 per cent of its workforce", she says. "Baby boomers, people born in my generation, have had a lot of opportunity because Singapore went through very rapid growth. In the last few years, you've seen a big push to increase the number of women working in Singapore. At SingTel, the workforce is about 50-50 despite being what is perceived as a very engineering-based company."
Chua's career, at what is now the largest company listed on the Singapore Stock Exchange, parallels the path of Australian rival Telstra. Both firms were transformed from engineering cultures and former government-owned monopolies to the dominant publicly listed operators in their markets with a rapidly expanding retail shareholder base of more than one million shareholders each. Chua joined the company in 1989 and helped guide the transition from grinding bureaucratic monopoly to competitive public company by October 1993.
"It was the first time they had corporatised a government entity of that size," says Chua. "At that age you don't worry about these things. You just go and do it. The company has truly transformed over the 20 years I've been with them and playing a role in that has been really exciting."
SingTel managers certainly had a broad sweep of challenges back then. For a start, Chua says, the mindset of a monopoly public service provider meant staff had an engineering and technical focus and never thought about competition. Staff talked about subscribers, not customers, and there were few qualms about how to deal with them if they were lax in paying. "When you are the monopoly service provider and someone dares not pay their bills, too bad. They don't get service. We never had customers; we had TDUs [total disconnected units]."
Huge transformation
Encouraging staff to focus on customers as stakeholders was a huge transformation. Chua says tackling compensation systems was the key. After decades of bonuses in the Singaporean public service being tied to the country's GDP, staff were placed on performance-based pay and rewards. Then there were the new positions that literally sprang up overnight, where previously the key professionals employed by the company had been engineers.
"We had very few finance people, we had no marketing people, no customer service," Chua says. "We hadn't needed customer service before! So we changed the mix because we had to start watching the bottom line."
Dragging the company across the privatisation line gave Chua an intense appreciation of the importance of attracting and nurturing good people to drive SingTel. Since becoming CEO, she's introduced what she calls an "end-to-end talent engine" whereby the company works hard to attract and motivate the best possible staff. Equally important is letting workers go with good grace.
"Gen X and Y are motivated very differently from baby boomers," she says. "We realise we need to make changes to HR to accommodate them. In the past, if you left SingTel, you would be viewed almost as a traitor. You'd never be allowed to come back. But if you look at gen X and Y, when you do the exit interview, they tell you they are happy at the company. They just want change."
Top performing staff get a personal farewell from Chua over a cup of coffee; their details are kept on file and they receive regular updates on the company. "I'll say: 'Don't assume you can't come back to SingTel'. Who knows, in five or six years they might come back and we've kept the relationship nice and warm. We actually have SingTel Alumni now."
Emerging markets
Once the transition to competition was complete, the next hurdle for SingTel was addressing longer term growth prospects. By the late 1990s, revenues from expensive international calls—once the source of huge margins for telcos worldwide—were seriously falling, while mobiles and corporate-related communications were on the rise. SingTel also had to address how it could grow its customer base. "When you have 100 per cent coverage and a population of only two million people, as Singapore had back then, the only way to grow is to go offshore," Chua says.
The company started off with tiny offshore investments. "We had the paging service business in Mauritius," recalls Chua. "It was so small that if one of the staff went to attend a board meeting, it would make a difference between whether the company was going to break even or make a loss. We started with investments that were that small."
The company also worked with a micro pre-paid model in developing economies. It allowed low-income mobile phone users to buy a pre-paid card for about US$1 that must be used within three to five days. Chua often likens this product to buying a sachet instead of a bottle of shampoo. "It's a quick-fix product. People use it very quickly to contact family or send text messages. They can then save throughout the week and hopefully buy another card. This model has significantly increased the reach for mobile communications services."
Today, Singapore accounts for just under a third of the group's earnings; Optus in Australia represents about 27 per cent; while regional associates (including India, Indonesia, the Philippines, Thailand, Bangladesh and Pakistan) comprise 42 per cent and "others" make up one per cent.
Like most global players, the SingTel Group is battening down the hatches to weather recessionary storms. The company is keen to increase SingTel's shares in current associate companies, such as the Bharti Group in India, if the opportunity arose and foreign investment limits were relaxed. If there are good buys into other regional telcos, the group will also consider them. Asia remains the focus, especially countries where SingTel has no presence, such as Vietnam.
Last year, there was much media noise about SingTel breaking into China. "China— we've all looked at it," Chua sighs. "It's a large market, still growing, but we don't make portfolio investments. We've always believed if you make a passive portfolio investment, you might as well return the money to shareholders."
As a wholly owned subsidiary of the SingTel Group, Optus and its customer base of almost seven million is high on the company's radar. Compare the massive population of the aspirational middle classes of Asia with Australia's tiny 20 million, and you'll wonder whether Optus is a true fit in SingTel's regional portfolio, which is more focused on markets with relatively low penetration such as Indonesia and Thailand. The answer is categorically yes.
"If you look at Singapore and Australia, and you look at the kind of growth that we were able to achieve in the last quarter, don't assume there is no growth out of mature markets," Chua says. "Optus showed a 10 per cent top-line growth in the last quarter, and Singapore showed 21 per cent."
For the nine months ended 31 December last year, the SingTel Group posted a net profit after tax of S$2.5 billion (US$1.6 billion). Meanwhile Optus held up surprisingly well with growth in mobile revenues. Underlying profitability stable and the company added a net 213,000 mobile and wireless broadband subscribers in the December quarter.
So just how do you get the growth? "Making sure we are able to move up the value chain and get a higher revenue from each of our existing customers. I think we've demonstrated we've been able to achieve that."
When SingTel took over Optus in 2001, the cultures were very different: the more entrepreneurial, informal Optus wasn't a comfortable fit with SingTel. Chua rejects the assertion that Optus has become a Telstra clone under SingTel's watch. However, Chua says the cultural differences were much less than expected. There is an exchange of staff both ways and SingTel has learned plenty from Optus. "There are a lot of good things we've taken away from Optus."
Optus had more capabilities in developing the mobile pre-paid business and we've used that to improve our mobile business in SingTel. Chua says SingTel brought financial discipline to Optus. Optus has also picked up SingTel's "lean" programme for improving business processes based on the Six Sigma doctrine.
SingTel and Optus now share the same CFO, Jeann Low, who commutes between Singapore and Australia. Chua says features of the business that are better managed centrally have also been shifted over, such as international traffic settlements. "When you put all your minutes in one location together, you get a better price."
Chua says the Optus "challenger spirit" is something SingTel has embraced and it is now a core value of the group. "I certainly don't think of SingTel as a big bureaucracy. We fight as if we are the challenger."
Managing for the times
Chua believes no industry will be spared from contraction and says international call minutes and some business mobile calls have recently also come off. However, Chua says communications is now on the list of non-discretionary items. "You're not about to give up your mobile phone, your Internet or even your fixed phone line.
"With the slowdown we are watching closely where demand is while watching our cost structure." SingTel and Optus imposed a hiring freeze last September and Optus cut engineering and technical staff last October. "We're looking at our discretionary spending and what we can cut. The managers have a dashboard which gives them very up-to-date information on how the businesses are performing. That gives us time to adjust our strategies and our capital expenditure plans."
Chua says there is more flexibility to manage down labour costs in Singapore compared to Australia. "In Singapore, labour laws are very different ... you can also cut basic pay. There are a lot of levers we can pull to adjust the cost base.
"Retrenchment would be a last resort. If you are so quick to ask people to leave in hard times, when the good times return, you will have done some damage."
