Happy staff the key to firm's success

Asiaonebusiness, By Sylvia Paik

WHEN his family firm was about to go belly-up, chief executive Erman Tan (pictured above) did not try the usual desperate tactics of new products or slashing costs.

Instead, he invested in his staff to save the firm.

Mr Tan had long felt that keeping employees happy and engaged was a key component to success, and he set about proving it with his chemical firm Asia Polyurethane Manufacturing (APU).

He had originally set his sights on working for a multinational upon graduating with a double honours degree in accountancy and information technology from Britain's Leeds University.

'My dream was to become a chief financial controller of a multinational. But when my dad passed away, I had to come back to rebuild my family's business out of family obligations,' said Mr Tan.

And while polyurethane, which combines the flexibility of rubber with the resilience and durability of plastic, is a vital chemical in making foam to insulate industrial and domestic products like car seats and toys, it is far from a glamorous industry.

'Working in the chemical industry wasn't exactly my cup of tea,' he said. And APU, which his father had started in 1985, was almost insolvent when Mr Tan, 45, took up the challenge in 2003.

'The transition was not smooth. When I took over, APU was almost gone. It was a big crisis. The company lacked cash flow. Our bankers did not believe in us. Some ex-colleagues walked out on us.

'I had to talk to bankers to give us time and build up their confidence in us.'

That was when he decided to focus on making APU 'the best place to work in the polyurethane industry', as he put it.

'A happier leader is a more effective leader. Whether you are happy or not, you still have to do it, so you might as well be happy,' he said philosophically.

Mr Tan believes the most effective way to enhance an organisation's performance is by 'building, attracting, retaining, growing, and enlarging' talent in the organisation, because 'your talent will be your biggest asset. Your staff can make things happen for you'.

He quipped: 'Just as the happiness of a woman is to find a good husband, the happiness of a boss is to find good workers.'

In focusing on his staff and intensifying efforts to keep his people engaged and productive, Mr Tan hit on one of the key problems among small and medium-sized enterprises (SMEs) here - retaining talent.

He himself is all too aware of how challenging it is for SMEs like his to attract and keep skilled people. Many cannot afford to pay top-dollar salaries or provide the prestige and facilities offered by multinationals.

Yet, he also acknowledges that SMEs must seek and retain new talent in order to sustain growth, instead of relying on the same old strategies and practices just to survive.

Thus, in order to compete, SMEs must offer something less tangible to employees, such as work satisfaction, a sense of teamwork and so on.

Mr Tan says he tries to provide what he calls CEO - 'Care, Empowerment and Opportunities' - for his staff, to make them feel valued. 'Grooming of talent, like nurturing a family, requires a lot of tender, loving care. It is a long-term investment,' he said.

'We definitely would encounter many unexpected challenges along the way. Nevertheless, we must continue to have faith and belief in our people, as one day the ultimate result would certainly be rewarding and fruitful.'

One of his senior employees, international sales manager Ri Gopalan, backs Mr Tan's approach, describing him as a 'charismatic and visionary leader' who has 'invested a lot in me', such as sending him on numerous courses and seminars in IT, management, leadership and service quality.

'As a boss, Erman is very open. He can share ideas, and he likes to give us interesting books by Dale Carnegie,' he said.

'In my 20 years of work experience elsewhere, I never got the kind of exposure as my three years here.'

Mr Tan's efforts have paid off since those dark days in 2003.

Today, APU is the largest polyurethane manufacturer in South Asia by sales revenue, with an estimated turnover of $101.2 million this year. It employs 75 people in offices in Singapore, Indonesia, India and China, and supplies companies in 15 industries - such as automotive, oil pipelines and construction - in more than 30 countries.

APU has won numerous industry accolades while Mr Tan has won leadership prizes, including Entrepreneur of the Year in 2005, awarded by the Association of Small and Medium Enterprises and the Rotary Club of Singapore.

He is now focusing on 'greening' APU. It received the Building and Construction Authority's Green Mark Award in 2007 and the Green Label by the Singapore Environment Council this year for its environmentally friendly products.

Like the polyurethane his company makes, Mr Tan believes in being flexible, yet resilient in the long term: 'Learn from others' mistakes, so that you never repeat them yourself.'

But he knows that his greatest resource resides within the firm's four walls: 'I believe APU is on the right track because I know what marvellous things can happen when you combine a little focus, a pool of talented people, and a lot of drive.

'I believe that a company is only as good as its people. When you grow your staff, if they are good, your company will be good.'

This article was first published in The Straits Times.