“The economic shift to Asia has critical nuances for leaders,” said
Charles Tseng, President, Asia Pacific, for Korn/Ferry. “Companies
need leaders who have the capability to lead innovation, have
capability in people and culture, and who can really tap into the
consumer in Asia.”
A new breed of leaders are needed in Asia 2.0
For decades, Asia served as the workshop for the world and exports
drove growth; that was Asia 1.0. The nature and role of Asia’s economies
has now dramatically changed. Asia’s consumers now drive growth, a
role that has become pivotal as the rest of the world enters a second
slowdown in the wake of the global financial crisis. Asia has entered a
new growth model which Korn/Ferry calls Asia 2.0, and it’s marked by
several fundamental shifts: companies are now focusing squarely on
Asia’s increasingly powerful consumers, particularly as Western
consumers pare spending. R&D investment is also moving to Asia as
companies strive to create and tailor products for the region’s diverse
consumer base. With that comes a workforce shift: companies need
creative talent who can drive that innovation.
Asia’s new growth model requires a new breed of leaders. Today, they
need the skills to craft strategies to generate new growth in underserved
markets; they need to use disruptive innovation to create entirely new
categories of products and services; and they must put together high-
performance teams that can operate in a global, multicultural
environment.
Figure 1
Asia 2.0 – Asia’s new growth model
Asia 2.0
Asia 1.0
Market shifts The impetus for change (2006 – 2020)
(1985 – 2005)
Consumer shift Made in Asia - Reduced Western consumer Made for Asia
spending
- Emerging consumerism in Asia
Innovation shift The world’s factory and - Shifting R&D investments The world’s
back office - Asia’s drive to innovate laboratory and
- Asia’s need to move up the value knowledge office
chain
Jobs shift Cheap and productive - Unemployment in the west Creative and
workforce - Western companies Asianizing innovative talent
- Asian companies globalizing
2
“Our leaders have strong competencies and are successful in their field
of expertise. What we want to do is elevate them to the next level,” said
Melissa Kee, Asia Pacific Director of talent management and diversity
and inclusion for The Dow Chemical Company. “We need more leaders
who can manage with vision and purpose, and who can step up, take
some risks and help define what the future will look like. That’s an area
where there still are some gaps.”
Figure 2
Asia 2.0 leadership skill sets
Asia is becoming the economic center of gravity in the world. This calls for distinct shifts in leadership skills. Korn/Ferry’s research
and experience with organizations in Asia Pacific have found the competencies below represent the desired list of leadership skills
to succeed in the Asia of today and tomorrow.
Customer
and market
cluster
Customer insight Managing vision and purpose
Business acumen Silo-busting/integrating
Building relationships
3
That kind of talent is in short supply. In China, just one percent of
executives and one percent of managers are ready to succeed in Asia 2.0,
according to a 2010 Korn/Ferry study. In India, just eight percent of both
executives and managers have these skills. The gap stretches across the
entire spectrum, from leaders to front line staff. A resounding 97
percent of participants at the Leadership Transformation conference said
they are facing a talent shortage; 50 percent said it was ‘reasonably
likely’ that key talent would leave their organization over the next six
months.
Figure 3
Factors of learning agility
Learning agility is a critical indicator of potential and should be used to differentiate talent.
Korn/Ferry’s new self-assessment viaEDGE™ provides scores on:
4
Talent management in Asia:
the professional, portfolio approach
Winning companies don’t manage their talent by accident. They create
and deploy a professional talent management program to attract the
best employees, get the most out of the people they already have, and
nurture their high potential staff. All that adds up to a sustainable
pipeline of talent.
5
Janssen worked with a HR consulting firm in Singapore to create a talent
management program to address this trend. One prong was to promote
learning and career development as part of its ‘employer brand.’ This
also serves to counter the growing trend of Chinese employees turning
to local private companies because of perceived better career prospects—
particularly in the wake of the 2008 financial crisis, which hit many
Retaining talent multinationals hard. MNCs, however, are widely viewed as offering
better development programs, an area that global companies need to
According to attendees at the Leadership
Transformation conference, the top factors promote and make good on. Johnson & Johnson took steps to raise its
that worked best in engaging and retaining profile as an employer of choice through university and MBA recruiting,
key talent in their organizations were:
highlighting the career and training potential, according to Alvarez-
> Compensation and benefits
Calderon.
> Development opportunities
> Employer brand Research has shown that 10 percent of development comes through
> Great work opportunities
training, 20 percent through coaching, and 70 percent from experience.
Johnson & Johnson has a strong e-university platform and coursework
> Quality of leadership
model in place to take care of the training; the next step in China was to
> Recognition work with front line managers to foster coaching and mentoring skills.
“We believe that focusing on the front line manager is key to making
Attendees’ biggest focus in the areas of
engaging and retaining talent were: this 10-20-70 formula work. It’s about the interaction, the coaching, and
the feedback that happens after the skill building is done. We are
> Career pathing
spending a lot of time on this,” said Alvarez-Calderon.
> Coaching
> Development opportunities The company also put a robust assessment program in place to map out
> Employee engagement employee’s competencies and skills. Janssen then created rotational
> Employer branding
assignments for high-potential employees to ensure they had a chance
to develop and grow. “Transparency and visibility of career opportunity
> Employer value proposition
is a critical part of how we build our team at J&J,” Alvarez-Calderon
> Greater collaboration added.
> Internal communication
> Leadership effectiveness Ignoring high-potential talent development is particularly risky in Asia
right now; not only is there competition for talent, but the global
> Onboarding and mentoring
slowdown will push individuals into the most secure jobs with the best
> On the job stretch
future prospects.
> Succession planning
6
Conference survey results
Surveys find action learning, succession planning
among the best leadership development practices
Every company has what it takes to develop world-class leaders—they just need to know how to tap the
resources and knowledge that already exist within, according to the findings of surveys Korn/Ferry conducted
during the Leadership Transformation conference in Singapore. Action learning projects and one-to-one
coaching are the two most impactful leadership development tools, according to more than eighty HR
executives and CEOs who attended the conference (Figure 4, below). Leaders who act as teachers also have a
high impact on the development curve.
When asked to list the best practices in leadership development, over 80 percent of conference participants
ranked succession planning as number one. Putting a coaching and mentoring system in place was the second
best practice, followed by identifying high-potential employees. Assessments play a big role in helping
executives identify, and nurture, the leaders of tomorrow. A quarter of conference participants cited 360
degree feedback as their assessment tool of choice (Figure 5, below). Psychometric personality tests and self-
reports ranked second and third.
HR executives widely agreed on a list of five core competencies they need in order to win support for talent
management and leadership development programs: an effective HR change-agent is one who understands the
business, communicates effectively, inspires others and acts with honor and character. HR executives who fail
to build a team, or are unable to adapt to differences, are most likely to fail. Focusing a talent management
program around the business process is critical to gaining that support, survey respondents said.
Figure 4 Figure 5
Most impactful leadership development as ranked by Preferred assessments as ranked by Leadership
Leadership Transformation conference attendees Transformation conference attendees
25% 25%
21%
20% 18% 20% 18%
17% 17%
13%
11%
8%
6% 7% 7%
4%
3%
0% 0%
7
Dow Chemical, for one, had to work hard on this after it acquired Rohm
and Haas in 2009, making it the world’s leading specialties chemicals
and advanced materials company. The deal took place during the worst
of the financial crisis and the HR team had to figure out how to help
manage the integration, shed staff to achieve cost synergies, and bring
the remaining staff and managers on board at the same time. Against
this backdrop, the company moved quickly to assess whether it had the
right leadership talent in the place to grow the business—was there
enough ‘2.0-ready’ talent in the pipeline to achieve its Asia growth
goals?
“The question was: how do we assess them, and how do we create that
self-awareness?” said Dow Chemical’s Kee. “It is not about telling a
senior leader what to do; it is about them wanting to make that
change.” So they embarked on an assessment of thirty existing and
potential general managers which Korn/Ferry designed to benchmark a
broad range of competencies and leadership skills.
In step with the leadership plan, the company also pinpointed a slate of
high-potential staff and put a career development plan in place for each.
A number of high-potentials are sent to head office in the U.S. to run
projects and moved periodically around the region to build experience
and visibility. Kee calls it “purposeful development intervention,” and
this—more than pay—helps attract and retain high-caliber staff in Asia
today.
Figure 6
Dow Chemical’s general manager capability
8
The program is still a work in progress, but efforts have paid off. Today,
two-thirds of the top leadership team in Asia Pacific consist of local
talent, and more than 90 percent of critical roles have local talent who is
ready now, or will be in two years, to step up to the plate. Two-thirds of
the high-potentials, meanwhile, are slated into that succession plan.
“We can buy capabilities
Dow is also putting a company-wide leadership effectiveness survey into and borrow people
play, which will ultimately hold managers accountable for developing from other regions and
their leadership skills. “We’re two years into our transformational New York, but this isn’t
journey, but we’re starting to see success. I’m already hearing leaders sustainable. In two to
say ‘OK, I have to take this on board. The company is serious,’” said Kee.
three years’ time, we
Two years ago, Estée Lauder Companies in APAC, gripped by the need to may need to replace a
prepare the next generation of leaders, and to cope with the growth number of key leaders.
strategy of the region, created a leadership development program that We need to build from
was so successful that it’s being taken to other regions by the company.
within.”
"With a challenging need to raise the skills of our leaders, and build a Figin Seng
strong pool of ready successors for the sustainability of the organization, Regional director of learning and talent
development, APAC
there is a real sense of urgency," said Figin Seng, regional director of Estée Lauder Companies
learning and talent development, APAC, for Estée Lauder Companies.
“We can buy capabilities and borrow people from other regions and New
York, but this isn’t sustainable. In two to three years’ time, we may need
to replace a number of key leaders. We need to build from within.”
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Sony’s future goal: to have a broad mix of tier-one global senior
management, from any nationality, running individual markets and
regions. “At that point, we will be a truly global company with a
Japanese heritage,” said Virendra Shelar, head of recruitment for Sony
AMEA. To do that, the company has invested time and effort into
identifying the top five percent of high-potential employees within the
region, and deploying that cadre into roles and projects to develop their
leadership capabilities.
Taking leaders out of their comfort zone and putting them into
situations where they have to innovate to adapt is a critical part of an
integrated leadership development program, according to Jacqueline
Gillespie, Managing Principal with Korn/Ferry leadership and talent
consulting. “We really have to immerse and align leaders in a future
world—they need to be immersed in the unfamiliar and pushed a little
bit.” Executives learn 25 percent of their skills through hardship
situations, yet most companies invest nothing in hardship support, and
invest the bulk—80 percent—on training, with just 10 percent on
deployment and 10 percent on coaching.
The most valued leadership qualities in Asia Marketplace innovations could include new HR, meanwhile, can support specific
today are creativity and the ability to drive packaging or ingredients that give an types of innovation by moving the right
innovation. These are the big differentiators existing product a fresh appeal; and people across divisions, and help
for many organizations in Asia, and operational innovation is about doing things managers create cross-functional teams
executives are looking to their human faster, better and cheaper. of people with the right skillset. It all
resources leaders for help on this, comes back to assessing, developing
according to Jane Stevenson, Vice “Companies have largely focused on and deploying your talent pool in the
Chairman, Board & CEO Services at operational and marketplace innovations in most effective way.
Korn/Ferry. Different types of innovation Asia for years. Now they need to create
require different types of leaders, and a new products and categories—and do it “It’s about matching a portfolio of talent
company also needs to pursue different faster, cheaper and better too,” said to a portfolio of innovation. Just as you
types of innovation at the same time. Stevenson. Executives also need to would manage a portfolio of
understand which type of leader can best investments, you wouldn’t just have all
There are four core types of innovation. push these different levers. An inventor bonds. You have a mix—that’s how you
Transformational innovations—like the would make a good transformational should think about this,” added
Internet—that are big-risk, disruptive and leader—but might not be the kind of Stevenson. “The more we have people
change society as we know it. Category consumer-focused, team-oriented focused on doing the right thing, the
innovations cascade from that: eBay, for marketplace innovator a company actually more we will be successful.”
example, created a new online auction needs to promote growth in a place like
category that leveraged the Internet. India, or create new categories in China.
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Leadership development needs to be a lot more strategic—and Asia
offers a competitive advantage to companies that want to pursue this.
Learning experiences are everywhere in the fast-moving growth market:
leading a cross cultural project team, for example, or managing a crisis
provides future leaders these critical must-have skills. “In Asia, we have
such an opportunity to develop leaders. It’s not hard to find a situation
to test a leader: learning experiences are everywhere,” said Gillespie.
“In Asia, we have such
an opportunity to
The road ahead develop leaders. It’s
not hard to find a
The opportunities in Asia are extremely lucrative from a marketplace situation to test a
perspective. To make the most of them, organizations need to define
leader: learning
what success looks like, manage talent, develop leaders and foster
innovation. HR practitioners are expected to be at the forefront of this experiences are
agenda. They need to up-skill themselves, their teams, and then deliver everywhere.”
fast. All this has to be done professionally. There is no room for
accidental talent management and development. Jacqueline Gillespie
Managing Principal, Korn/Ferry International
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About the Korn/Ferry Institute
The Korn/Ferry Institute generates forward-thinking research and
viewpoints that illuminate how talent advances business strategy. Since
its founding in 2008, the institute has published scores of articles,
studies and books that explore global best practices in organizational
leadership and human capital development.