Heidrick & Struggles Volume 1 Spring 2001

How would you contrast the various regions and industries in which Walden invests?

Service providers and wireless will be a long-term growth areas. Wireless in the U.S. is still a secondary means of communication because there is such an efficient fixed line and infrastructure in place.

However, in some parts of Asia, Europe and Latin America, wireless is the only means of communication. Tremendous opportunities also exist in optical networking and in the shortage of components in the U.S. and Europe. China and Taiwan remain the manufacturing hubs for Asia. In a broad sense, the U.S. is more technology-driven and most often has led design in telecommunications, enterprise software, and semiconductors. Asia tends to be more focused on process and manufacturing - for example, semiconductors. The leading fabless design originated mostly in the U.S., but most of the leading foundry testing packaging was established in Asia. In India, there is a lot of low-end program develoment, but the skill set is improving tremendously and now India produces some very high-end network management. Also, india does very well in the Digital Signal Processing (DSP) and semiconductor programming spaces. Nine out of ten companies in the DSP area come from India.

Can you offer advdice to CEOs and venture capitalists regarding China?

China is a huge market, especially for penetration in the telecom market, but when taking a closer look, the addressable market is very small or sometimes even closed. Even though it is open now, there are numerous protective government regulations. Joint ventures can be a challenge. Growth is much slower in China; however, it is a market you should not ignore. Also, it's important to understand the culture and to have patience with the pace. Strong listening skills are valuable when conducting business in China. As with normal business dealings in Asia in general, a good ear and humility go a long way. Modifying and adjusting to the local markets and the local requirements can pay big dividends in the end.

What advice would you give a CEO thinking about corporate venturing?

Corporate venturing is very exciting and there are many success stories. Cisco, IBM, Intel, Nortel - they each take different approaches and have their pros and cons. In general, we'd really like more corporate venturing to happen. For big corporations, it can be a way to increase revenues by investing in customers or in technologies that better your organization. Corporate venturing is also a very good way to attract and acquire top-tier talent.

What qualities are you looking for in senior management now?

People with strong marketing backgrounds or who are very creative in terms of putting partnerships together. People who can think out of the box because the market is changing so rapidly and so dynamically that you need people who are able to drive a company in a unique way and create a new revenue or business model that defines the value proposition you provide in today's competitive world. From a regional perspective, most of the top marketing and senior management talent comes from Europe, U.S. and Asia-Pacific area. In terms of operations and process management, many come from Asia.

How can CEOs best handle the amount and quality of information coming in from multiple channels, and the speed at which they have to make decisions?

Knowing how to attract strong talent to the management team is critical because it is almost impossible for any one person to have a full grasp of all the available information. There is just too much information to digest, and things change by the minute. It is important to surround the CEO with smart people who are empowered to make quick decisions and who have an eye for detail as well as an understanding of all the key elements. John Chambers, Cisco's CEO, is the quintessential example. Meanwhile, being a CEO is very much a marketing and sales function, and a good CEO knows how to sell an idea to the next level. If you don't attract world-class talent into the management ranks, it will be difficult for the CEO to function.

So, senior management needs to act as salespeople and approach employees as customers?

Exactly. It's about selling the vision and the direction to the intangible side of your business. To attract talent, you have to sell value propositions to your employees just as you do to customers. Again, use John Chambers as the benchmark. He is not selling his quota; rather, he is selling his concept of a digital economy to his team. Indirectly he is selling his product at a very high level but it gives the high impact he needs. Salesmanship is an essential skill for a CEO in the New Economy.

What are the characteristics leaders need to possess in the New Economy?

First of all, we really need to teach our young people, the next generation, about leadership, the history of leadership, and the impact of good leadership. This is critically important and is something we are not doing well.

Generally speaking, intellectual honesty and ethics are very important in today's leaders. It is dangerous and costly when a CEO is not quite sure what is going on but he or she pretends to know. Industry knowledge and operational experience are being more valued since the dotcom frenzy has subsided. Finally, those who can be creative in developing their leadership in the marketplace will be successful.

Walden International is a leading U.S.-based global venture capital firm, and has been providing early stage technology companies with the advantage of an unrivaled global network since 1987. The firm's international venture capital funds comprise more than $1 billion in committed capital. Walden International's globally organized network of multicultural investment professionals spans the U.S., Taiwan, Singapore, Hong Kong, Malaysia, China, the Philippines, India and Japan. For more information, visit www.waldenintl.com