Asia is a region defined by cultural, social, political and economic diversity. The development of more open trading systems, improved commercial infrastructure and reduced transport costs have driven increased regional integration and interdependence, resulting in astonishing growth within Asia in recent years.
The nature of this growth has also changed. The signing of the China-ASEAN Free Trade Agreement in 2010 has created the third largest free trade zone and the world’s biggest pool of consumers. Asia is now tracking to account for 66 per cent of the world’s middle class by 2030, up from 28 per cent in 2009. Whilst Asia’s historically export-led economies used to fluctuate in sync with demand from core Western markets, there has been a significant decoupling in recent times. Domestic consumption, domestic investment, and intra-regional exports are now the key drivers for growth (Asian Development Bank, 2010). This has led to a directional shift for the region from low cost manufacturing to service Western markets, to one of innovation and entrepreneurialism to capitalise on relatively high growth domestic Asian markets.
This breakdown in economic barriers, and shift in consumption, has significant implications for leadership in Asia. As geographic and economic barriers reduce, cultural barriers start to present more varied challenges for business leaders. This is not only limited to Western expatriates, but also extends to relationships between Asians from neighbouring countries, being just as complex.
In a series of Thought Leadership round tables with APAC HR Leaders, hosted by The Chapman Consulting Group in first quarter 2013, and cross referenced with research from HCLI (Human Capital Leadership Institute) and Watson Wyatt, we have identified a list of competencies now required for business leaders in Asia:
- Creativity and Innovation – Open to new ideas and experiences. Thinks strategically. Produces a range of solutions to problems. Creates an environment that supports creativity.
- Adaptability and Flexibility – Accepts new ideas and change initiatives. Deals with ambiguity and seeks out the opportunities it might present.
- Cultural Collaboration – Collaborates effectively across organisational, functional and geographic boundaries, and leverages diversity. Looks beyond one’s own culture for business opportunities and resources.
Recognising that different organisations will have different requirements from their leadership team, this list is not designed to replace, but rather to complement or stimulate critical analysis for existing models of leadership for companies operating in Asia.
Another challenge many companies shared was a shortage of these particular competencies within their current leadership team or from the external candidate market. Our study found that these competencies have strong linkages with multicultural experience. This understanding can influence decision making and should form the platform to competency development within organisations.
Examples of these initiatives were shared in the Regional APAC HR Leaders Series, which cited the following programs as most effective:
- The importance of ensuring that high potential talent is made more visible within the organisation was coined effectively as ‘Know your talent, grow your talent and flow your talent’. On a regional level, the discussion centred on increasing strategic rotational assignments and exposure to group headquarters, in conjunction with the appropriate levels of mentoring and support.
- The group discussed the importance of moving away from a reliance on expatriate talent and the need to embed mechanisms to ensure local talent is developed effectively. Often there is a need to remove the layers that can block career development. The deployment of a local ‘talent council’ to facilitate rotations and champion talent development was one such approach.
- We covered the globalisation of talent and acknowledged that a more tailored approach is required to determine the specific leadership qualities that are required at a local/regional level. This can allow us to identify high potentials accordingly, though there is a need to educate global leaders on the nuances of the region.
- Other methods of promoting the flow and upward mobility of local talent included utilising short-term assignments, rather than 2-3 year placements, and selecting local talent on talent councils in order to foster this home-grown progression and development.
- Approaches and attitudes towards Diversity and Inclusion were compared and contrasted across different organisations from high technology and telecommunications, to banking and manufacturing. Some key conclusions drawn were that most companies have a Diversity initiative in place, but this is often established by headquarters and not adapted to regional considerations. Diversity and Inclusion initiatives can therefore be too focused on staple aspects, such as gender and ethnicity, whilst omitting various nuances in particular regions and locations, especially those linked to Inclusion.
Drawing from these focus groups and research studies it is apparent that many companies are still operating with more traditional models of leadership developed out of Western markets, or leadership models that are simply outdated for the current challenges of Asia.
Given the dramatic changes in the economic landscape in recent times, it could be time to take stock and challenge your company’s leadership competency framework.
Simon Bell is the Managing Director for RMI Assessment and Development, an associated company of the Chapman Consulting Group.
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Australia in the Asian Century; Commonwealth of Australia: firstname.lastname@example.org 2012