BIZCHINA / Weekly Roundup
Trouble at the top
(China Daily)
Updated: 2006-02-21 14:56
China Inc may be riding the wave of a robust economy, soaring exports and
rising spending, but it faces a building storm in the boardrooms: a lack
of leadership.
A series of reports by international consultancies from Hewitt Associates
to Goldman Sachs, Deloitte and DII, show that many companies are
acknowledging that some of their leaders lack certain skills. Yet the
studies also reveal that they also simply do not have enough experienced
people coming up through the ranks to assume key roles.
Unfortunately, this leadership shortage is likely to get worse before it
gets better, says Simon Keeley, head of Hewitt Associates' new Hewitt
Asia Leadership Centre, explaining that over the next 10 years or so we
can expect to see a relative population decline in the age groups
associated with leadership in the past.
Paul Carter, president of the China operations of leading global
pharmaceutical company GlaxoSmithKline, is pleased with the progress in
the world's fastest growing market, but worries about inspiration at the
top.
"We are definitely facing a leadership difficulty in China, where it is
very hard to find local leaders. It all boils down to supply and demand."
There are many extremely talented people here, but unfortunately they
lack the necessary experience for senior roles. Those with the right
blend of pizzazz and experience are fiercely pursued, says Carter.
But what defines a good leader in a company operating on a global scale?
"Effective leadership has an absolute effect on the business achievements
of any organization, and leaders are clearly those people who motivate,
inspire and engage their teams through a strategy designed to grow the
business," says Alec Bashinsky, national partner of People & Performance
with Deloitte Touche Tohmatsu.
"We have developed a strategy called the Three G's: Grow the Business,
Grow the Team, Grow Yourself."
The Best Employer 2005 survey by Hewitt Associates, one of the world's
top human resources outsourcing and consulting companies, shows that a
strong grasp of corporate vision, sound communication with employees,
transparent executive procedures, explicit development strategies and the
capacity to develop talent over the long term are the most sought-after
abilities in a leader.
Traits such as operational wisdom, an ability to engage employees, a
passion and belief in the individual, corporate vision and loyalty to
employees are indispensable, says Li Xiujuan, vice president of Cheung
Kong Graduate School of Business.
A survey last year by Heidrick & Struggles - the first executive search
firm licensed to conduct business in China - covered 109 multinationals
in the Asia-Pacific region. Forty per cent had Chinese mainland nationals
leading their China operations, 30 per cent had an Asia Pacific
expatriate at the top, and the remaining 30 per cent had Westerners.
If a mainland Chinese executive were in the top position, 65 per cent
said a Western-based education was critically important or very
important. Half also valued Western-based work experience as either
critically important or very important.
Companies are clearly aware of the problem and are working on ways to
address it, especially in terms of nurturing internal talent.
Looking outside to fill the vacuum at the top might be expedient, but it
would be just as convenient for managers to hop to other opportunities.
The focus is increasingly moving to the much-hyped option - organic
growth.
One US-based chain retailer, for example, is going to great lengths to
emphasize managerial staff localization, because the industry thrives on
local knowledge.
Most of the company's senior executives for its China business are
Westerners, Hong Kong residents, Taiwanese or overseas Chinese returnees,
according to the company's HR department.
"We, of course, hope local people get to the top," says an HR official
from the firm. "However, talent with international experience, insight
and the ability to work with global headquarters is scarce on the
mainland."
Fifty-two mid-level managers, locally headhunted by the company amid much
fanfare, get regular training to upgrade their executive abilities and
broaden their range of experiences.
Another multinational, US-invested auto parts supplier ASIMCO, began its
Leadership Development Programme (ALSP) in 2001 to expand its talent base
locally and prepare individuals for career advancement.
"There is a large pool of underutilized talent in the organization that
needs to be identified and trained as future leaders of ASIMCO. It is
expected that graduates of the programme will provide ASIMCO with a
proprietary management talent base in an environment where the major
threat to success is a shortage of qualified, professional managers,"
says Michael Cronin, executive vice president of ASIMCO responsible for
HR management.
Every year, 25 employees and managers are selected to take part in the
year-long programme.
It includes four closed training courses drawing on a wide range of
subjects including finance, purchasing, marketing, human resources,
quality, lean manufacturing, exports, and logistics.
Trainees apply their new skills and experiences to their own projects to
practice what they have learnt. Leaders help the trainees finish their
goal-oriented projects.
Cronin says ASIMCO leaders are clear about the direction of the company
vision. They emphasize team development and customer satisfaction, are
able to motivate people, and are effective leaders.
They should be models of respect and credibility, people who do what they
say and say what they do. Leaders need to have positive attitudes and be
able to quickly put together cohesive teams.
"So far, 75 have graduated, around one-third have become mid-level
executives, such as general managers of subsidiaries and managers of
headquarter departments," says Cronin.
"We are designing post-graduate programmes for them for further promotion
to the top level."
Multinationals such as GlaxoSmithKline, Caterpillar and Johnson & Johnson
are also striving to cultivate their leadership pool.
"Internal leadership is practical and effective. It strengthens employee
loyalty and facilitates the consistency of the corporate culture, so it
helps us realize our corporate vision," says Simon Li, general manager of
Johnson & Johnson Medical (China) Ltd.
Of course, HR consultancies are working to fill this void, specifically
by filling the talent gap internally.
Hewitt Associates, for instance, launched the Hewitt Asia Leadership
Centre (HALC) last October. It is aimed at helping multinationals
confidently address chronic leadership problems.
The centre serves the entire region from its hub in Shanghai by
supporting companies through corporate-tailored and overall leadership
development solutions.
HALC works with companies that are looking for a planned approach to
assessing their people for leadership potential, offering challenging and
meaningful development experiences for current and future leaders, and
putting in place the necessary systems to support these programmes.
The centre also collaborates with academics and universities to conduct
focused research on emerging leadership challenges in the region and the
nature and drivers of successful leadership in Asia.
Keeley says that HALC works closely with companies to conduct individual
leadership assessments and design development programmes.
It identifies barriers to team effectiveness, builds strategies to
enhance effectiveness, and facilitates shared understanding of
organizational goals and strategies.
It also explores what is expected of leaders themselves and their people,
in line with those goals and strategies. It works with leaders and HR
teams to ensure that their leadership strategies are aligned with overall
business plans.
(China Daily 02/21/2006 page1)
Most Popular Stories in 48 Hours
� On the ball
� China, US vow to ease trade tensions
� Nation to cut back savings rate
� China to end domestic share sales ban
� China raises yuan market prospect
Today's Top News
� Auditors: Billions for water projects go down the drain
� 'China, US should fight protectionism'
� Man jailed for plotting to murder Bush
� 'Hillary too sexy to win White House'
Top Biz News
� EU may slap tariff on TV makers
� Duties on shoes 'step backward'
� Shanghai VW revs up for Skoda launch
� No timetable for levy of fuel oil tax
� Gutierrez: US draws significant commerce benefits from China
Learn mandarin
