Michael Drake on growth
“The potential of our business in China is embodied in the qualities of our people here. They are incredibly motivated, hard-working and ambitious.”
“Master the lesson”
Michael Drake says that he’s learned more in the year and a half or so since he moved to China than he has in any other period of his working life. “I’ve discovered new insights about TNT’s business, about people and culture—and definitely about myself,” says Drake. That may not seem so unexpected for a Briton relocating to China at a time of such phenomenal economic development. But when you consider that Drake had already spent more than a decade in the fast-growth markets of Asia, it takes on a little more significance.
Before moving to Shanghai in late 2006 to lead TNT’s business across China, Drake spent 14 years with TNT Express, all of them in Asia. His initial transition from London to Singapore was “an extremely big move,” he recalls, because his work with a logistics company was progressing well and he and his wife had three children under the age of 4. “To move was a big risk. But fortune favours the brave,” he says. “We decided to go for it.”
Since that initial move Drake held various posts that included both national and regional responsibilities. His most recent was managing director of the Asia region. Still, taking on the role in China was a big change. China has 100 cities bigger than Singapore. Indeed, the sheer size of China and the cultural differences between geographies prompted Drake to establish a regional structure for the business shortly after his arrival. He installed a new management team that comprises of a mix of talent and includes more local managers. Drake selected the team to blend “intelligence and pragmatism” to carry out TNT’s strategy and ensure that the business stays close to its customers. “Customers in China are not so different to customers in, the UK, Indonesia, Brazil or America,” he says. “They all want a fair price, they want good service, and if things go wrong, they want you to be there for them.”
The new regional structure also brings advantages for employees, giving them a more direct line of communication with top management, and creating a path for local employees to advance their careers within the company. This is particularly important for China’s ambitious young workforce whom Drake describes as some of the most aspiring people he’s ever worked with. “People here have so much energy and ambition,” he says. “Their drive to create something worthwhile and to be successful is evident in everything they do.”
Among the lessons that Drake has learned thus far in China is that managing such a big business with such big ambitions demands clarity of direction and sense of purpose for employees—and Drake is very clear on where the business is headed. “I believe we can become market leaders in China. The main pillars will be to become the leader in the domestic sector of the Chinese market and also the leader in the China-to-Europe sector of the international market,” he says. The company is making some big steps toward achieving those goals.
In 2007, TNT began operating a 747 aircraft between China and Europe—which remains China’s single biggest trading partner—and plans are underway to add a second aircraft as volumes increase. In the domestic sector, the transformation of Hoau’s network will bolster TNT’s ability to deliver goods across China. And as China’s domestic sector develops, TNT will be in a strong position to capture the business that will result. Today, says Drake, there is very little demand for next-day and time-definite services in the country. Customers either can’t afford or are not willing to pay for a faster service. “But as the country and its citizens become more prosperous and domestic consumption starts to gather pace,” says Drake, “we have the exciting opportunity to start shaping that part of the market.”
There’s still a lot of work to be done in China, and Drake warns against unrealistic expectations, reiterating that the market is still in its infancy and still faces challenges, including infrastructure development and increased regulation, that will take years to bring to world-class standards. But if there’s one thing Drake has learned about China, it’s that its opportunities are enormous.