Mr Lee Yi Shyan at the centre for Creative Leadership Award Ceremony, Recepient of 10th Distinguished Alumni Award for 2008

SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE CENTRE FOR CREATIVE LEADERSHIP AWARD CEREMONY, RECEPIENT OF 10TH DISTINGUISHED ALUMNI AWARD FOR 2008, 26 FEBRUARY 2009 AT 0915 HRS

Good morning

Mr John Ryan, President and CEO of CCL

Lionel Yeo, Dean of Civil Service College,

Ladies and Gentlemen

How I got to know CCL

A very good morning to all. First, let me extend my warmest welcome to President John Ryan and our old friends in CCL for being here with us this morning. For John, it’s a long way from Greensboro, North Carolina, thank you for travelling the distance to join us today. There is a Confucius saying: “有朋自远方来，不亦乐乎！” meaning - “What a delight to have friends from afar visiting with us”. I sincerely hope that your stay in Singapore will be enjoyable and fruitful, and you would find many good reasons to return in future.

As CCL celebrates its 5th anniversary in Singapore, I can’t help but travel back in time to when we first discovered each other. This was the fall of 1999. To better prepare myself for the appointment to the Deputy CEO of PSB (Productivity & Standard Board), I enrolled myself into CCL’s Leadership at the Peak (LAP) program held at Colorado Spring, Colorado. I’d tell you, it was one of the best decisions I made for myself, and I believe in some ways, for Singapore too.

It is no exaggeration to say that the subject of leadership is probably one of the most studied and published subjects in the world. I did a search on Google. The word “leadership” returned 141 million searches. The phrase, “Books on leadership” returned 54.8 million searches and the phrase “effective leader” returned 44.6 million searches.Yet in reality effective leadership seems to be the exception rather than the norm, going by many employee surveys.Why are effective leaders in short supply?

There are no simple answers to these questions. But what impressed me most when I attended CCL’s LAP program in 1999 was their research-based methodology. CCL studies and analyses the traits and behaviors of thousands of effective leaders at every level. They help leaders-to-be discover their own strengths and weaknesses, against the benchmarks of a large population size. They provide insights to what makes an effective leader and what derails a career.

Clearly, I learnt much from the LAP program. Not just from the lecturers and coaches, but also from the sharing of experiences from fellow participants in the class.At the end of the LAP program, as a Director of HR, I asked myself; “Wouldn’t it be great if these leadership development methodologies and practices could be introduced to Singapore and be shared with many more CXOs and HR professionals?” It would mean a quantum leap for our capacity for leadership development I thought. With that in mind, a few of us went back to Greensboro, North Carolina a few months later to pursue CCL with the then-President, Mr John Alexander.

Over the next two years, we tried to persuade and explain to CCL that it would be in their interest to expand their research work to cover Asia from Singapore, given Asia’s growing economic importance and needs for leadership development.

I am glad that the rest is history. CCL established its first Asia Pacific Office in Bukit Merah in 2003. Here we are, after the pioneering work of Michael Jenkins, Meena Wilson and a few others, celebrating 5 years of growth and influence. John, I want you to know that hundreds in Singapore have benefited from the various CCL programs. From here, CCL has also offered its services to many in China, India and the region. I have been reading your newsletter “Lead Asia”, and I applaud your team for a job well done!

While leadership development has always been a long-term proposition, the current global financial and economic crisis has added new dimensions to both the theory and practice of leadership. With many companies in trouble and changing their leaderships, for instance, it would be reasonable for one to ask of the leadership qualities needed in a crisis situation.

The financial market melt-down which started in October last year has set the stage for a prolonged and worldwide recession. With the G3 economies in recession, most export-led economies in Asia are feeling the impact. From Thailand to Taiwan, China to Korea, the latest numbers suggest sharp declines in trade. In the same way, Southeast Asia and Singapore have not been spared.

The priority of many governmental interventions since Oct 08 has been to restore the liquidity and stability of the financial markets. Nearly five months later, confidence in the financial market remains fragile. To be fair, time is needed for the world to absorb the massive write-offs some estimate to be in the tune of US$2.2 trillions. In his testimony to the Senate Banking Committee, Mr. Bernanke assured that the Fed “was committed to using all available tools” to stanch the financial market and unfreeze credit markets. We hope he will succeed.

Many economists accept that short term governmental interventions are necessary to restore confidence, but they differ on how long and deep the government intervention should be, before market distortions and morale hazards set in? For instance, should the state intervene and control the financial system to the extent that bankruptcy becomes a near impossibility? We know well that a party insulated from risk may take on more risk. Is there such a thing as an optimal balance between regulation and innovation, between accountability and dependence, between saving jobs and uncompetitive industries, between globalization and protectionism?

I am not saying for a moment that there are straight answers to these questions. Overlay with job losses and political considerations, many politicians around the world would feel pressured to opt for the expedient solutions in place of the right solutions.

In the case of Singapore, an island state of 707 square km and 4.6 million populations, it has been our mantra that the world does not owe us a free lunch, and we survive by staying relevant to the global economy. How we respond to the current crisis, to the set of paradoxical policy options would determine if we were to emerge the crisis stronger and be better prepared for the upturn or much weakened, that will set ourselves up for a downward and long term decline.

Principles of Correct Responses

By now, most of us have little doubt that the financial crisis, and economic contraction before us are of unprecedented scale. As such, there is really not a ready playbook to act upon. In devising the correct response, we may be required to try new and untested methods. But however novel and unconventional our methods may be, we should not abandon some of the very fundamental principles that have helped us come to where we are today. Let me share with you my thoughts on them.

The first principle is People-Centeredness. The idea here is that every child has the opportunity to realize their full potential. We are constantly seeking ways to give the maximum number of people a lift in their capacity to seek a better standard of living.

Consider our emphasis of education. The fact that we have been consistently investing between 3-4% of our GDP on education over the past four decades reflects the seriousness of this country on human resource development. In fact, our education spending has always been the 2nd largest item in our annual budget. Sustained investments in education have ensured that our students do well at all levels. Graduates from vocational training possess the right skill sets to fit into the job market. Our universities, while relatively young, have become among the best in Asia.

Consider also a very important component of this year’s budget - the $5.1 billion Job Credit, SPUR and Workfare Income Supplement that are designed to help workers retain their jobs or stay in training. These are new initiatives that add on to many ongoing, life-long learning initiatives to equip our workforce with the latest skill sets so that they can be self-reliant and independent.

As society becomes more sophisticated, special interest groups would emerge. The role of the government would be to accommodate the aspirations of the various groups while safeguarding the majority’s interest. A society cannot progress if the constituent groups are divided and polarized. Therefore, in the multi-racial and multi-religious Singapore, we take great care to ensure that all races share a common set of values towards nationhood.

Our second principle is to “Invest in the future”. This is a long term mindset which influences the way we use our resources and build this city-state. Our planning horizon stretches from 5, 10 to even 20 years. In our urban planning, for instance, we have to plan room for growth to accommodate a larger population while maintaining or enhancing the livability of the city. On some issues such as population size and population aging, we are even planning for the next 30-40 years. Planning long term focuses us to carefully use our limited resources to achieve sustainable development.

Investing in future would also mean building new hardware and software infrastructure. Consider the $4.4 billion component of the new budget for building world-class infrastructure, schools and healthcare services with the accompanying operating systems.

Investing in future also means identifying our next generation of leaders early, giving them the time to acquire experience and mature. In this context, leadership development, whether for the public and private sector, has a special urgency in Singapore. For a small island state, we need the best leaders we can find and groom to take on the various leadership positions in this country.

One aspect of our long term policy mindset has been the introduction of the CPF Life. This is essentially a program to help individuals provide for themselves a life-long income after their retirement. With the commencement of this program in September 09, we are preparing the population - especially those in the early 50s so that they can save enough to provide for a stable income stream in their old age.

Another example of our long term thinking has been the way we develop this city. We took care of air pollution from day one in the 1960s when “sustainable development” had not even become a fashionable term. The logic was simple: we lived in a small and compact environment. If we make it filthy, all would suffer. So we cleaned up the water bodies, closed down polluted industries and planted trees and flowering shrubs to create a garden city.

The third principle is financial prudence. In normal times, we understand the importance of savings, and live within our means. In time of emergency like this, we retrieve part of our savings to tide over the slow down. But once normality resumes, we have to start saving again to prepare for the future.

It is in this way we operated on budget surplus for most years since independence. We were conscious about the need for financial prudence, and spend readily on infrastructure and capability building but were wary of dishing out any form of social welfare and unearned handouts. We principally believe market creates wealth and government does not. In order to do more for the masses, we have to help businesses succeed, which in turn create jobs and enhance government’s ability to improve social infrastructure and invest in capacity building.

We have also been conservative in the way we manage our financial institutions. For instance, we set monthly caps on credit card spending based on an average of 2 times the monthly income of the consumer. We also require a minimum cash deposit for housing purchases. The overall tone is one that checks excessive consumerism driven by easy credit. Today, our financial sector is stable and healthy, our banks do not face the same credit squeeze as their US/ European counterparts.

Conclusions

Someone said that the global economy is going through a major “reset” to restore new demand and supply equilibrium. No one can tell for sure how long this adjustment may take. But we know from past experiences that the downturn would eventually pass. What we need to do now is to conserve our energy, adapt to the emerging and new scenarios and prepare for the upturn.

We are approaching this downturn from a position of strength. As a nation, we have a strong balance sheet, responsive institutions and competitive companies. We are cohesive and coordinated. Together we will sail past the current setback to reach new markets in the horizon.

As I said earlier, leadership development is a long term endeavor. While our current team is in place, we should prepare our team 2 and team 3 to be ready, tested and tried so that future tsunamis would not knock them out. Many of you here are in leadership positions in your respective organizations. I would like to encourage you, as I remind myself, to be zealous in our pursuit to be a better and more effective leader. Leadership is a calling. We owe it to our followers to lead them to success.

Thank you.