The Importance of Family and Personal Contacts

By Bangkok Post, Thailand

Jan. 20–A strong focus on trust has translated into the avenues for sourcing talent that Asian entrepreneurs typically take. Social networks were reported to play a prominent role.

Conventional wisdom states that it is easier to interact with people we already know, i.e., maintaining existing contacts is easier. In the Asian context, this is complemented by a cultural preference for long-standing personal relationships and tried-and-tested personal interaction.

Furthermore, many of the Asian entrepreneurs in INSEAD’s survey trace their social networks not only to family links but also to their university contacts. In fact, contrary to Western stereotypes, family ties to the company founder ranked surprisingly low on the entrepreneurs’ lists of important manager attributes: all respondents named this as one of their three least-desired attributes, with 88.8 percent ranking it the lowest priority.

By contrast, universities have emerged not only as a vital hub of social interactions, but also, especially for high-growth companies working hard to sustain their edge in technology and innovation, as vital sources of R&D expertise.

They are also centrepieces in the emerging research and innovation clusters that many of Asia’s most successful entrepreneurs have leveraged on their research, product-building and internationalisation trajectories.

Some of the biggest challenges that entrepreneurs face when hiring are the comparative paucity of ideal candidates and selling their vision of the company to the candidate.

These challenges are understandably a corollary to entrepreneurs’ preference for candidates based on values.

Many entrepreneurs in INSEAD’s survey agreed that in attracting talented manager candidates, they often had to battle a perceived lack of “glamour” in their segment of the market.

Most respondents have chosen to counter this perception by presenting new ventures as exciting, non repetitive places to work and as valuable learning opportunities.

Values and relationships also play an important role in deciding on the source of potential candidates. In contrast to larger firms, entrepreneurs overwhelmingly preferred personal networks over the services of recruitment firms (81 percent of the sample).

Trust is considered easier to establish through a personal network. Moreover, referral networks allow for greater communication and alignment of the firm’s values with the candidate. In fact, most CEOs are negatively inclined toward headhunters, believing that they are expensive, care only about money and are not reliable. But they would consider engaging recruitment firms as the companies grow and become more professional.

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Copyright (c) 2007, Bangkok Post, Thailand

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