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November 2011
The economic shift towards Asia created new demands for corporate leaders. Cultivating a sustainable pipeline of learning agile talent that can drive innovation and operate in a global, multicultural environment is crucial to success in this region. Only by making talent development the top agenda will companies be able to reap the enormous opportunities.
As the center of economic gravity shifts to Asia, the regions corporate leaders have come under the spotlightand under the gun. Competition for talent is fierce, and good senior management is hard to find. The demands placed on those managers, meanwhile, are rapidly changing as Asia moves up the value chain. Cultivating leaders that can drive innovation is now critical to success.
Chief executives and human resource leaders from a diverse group of companies, including Johnson & Johnson, Sony Electronics, Aviva, SAP, Este Lauder, Google and The Dow Chemical Company, delved into these issues at Korn/Ferry Internationals annual Leadership Transformation conference, held for the first time in Singapore in August. The conclusion: pursuing talent management by accident will prevent companies from riding Asias trajectory. Asia is now the engine of global growth and human resource executives play a critical role: they must have a solid game plan in place to develop the human capital needed to fuel their companys growth. 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.
Figure 1
Market shifts
Consumer shift
Made in Asia
Innovation shift
- Shifting R&D investments - Asias drive to innovate - Asias need to move up the value chain
Jobs shift
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. Thats an area where there still are some gaps. The hotel industry, meanwhile, offers a snapshot of the consumer shift. In 1990, 75 percent of guests in high-end hotels in Asia were from out of the region; today the opposite is true. Just 25 percent of hotel guests are not from Asia. The number of hotel rooms, meanwhile, has grown twelve-fold. Leaders must have the insight and expertise to tap into consumers in Asia, said Patrick Imbardelli, CEO of the Pan Pacific Hotels Group. If we look at Asia 1.0 versus Asia 2.0, the biggest difference is that its now about Asia, for Asia. Its no longer about Asia for someone else. We have to move the needle. That has a profound impact on the kinds of leaders and employees companies need. Yesterdays general manager needed technical and functional talent to ensure the business ran smoothly. Todays GM has to be innovative and able to find new ways to distinguish the brand in the minds of local consumers. Pan Pacific wants to decentralize its leadership structure to put decisions closer to the customersand needs local talent to drive those connections. We are very much focused on acquiring and developing talent on a local basis, with a global mindset, said Imbardelli.
Figure 2
Creativity Breakthrough thinking Innovation management Personal learning Collaboration Dealing with ambiguity
Emotional intelligence Coaching/mentoring People and Inspiring others Innovation culture Cross-cultural savvy cluster cluster Building effective teams Learning agility Customer and market cluster Influencing without authority
Customer insight Managing vision and purpose Business acumen Silo-busting/integrating Building relationships
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. HR executives have a role to play in bridging this talent gap, said Korn/Ferrys Tseng. They need to help their organization create a program to foster talent and build capabilities from within; they need to help create succession plans for key leaders and managersand put programs in place to Learning agile individuals are f lexible, foster the kind of learning agility these leaders need to succeed in Asia today. adaptable, and resourceful [and] are best Learning agile individuals are flexible, positioned to deal with the complexities of adaptable, and resourceful; they excel at making and marketing products for absorbing information from their experiences and using that to navigate unfamiliar consumers across Asias diverse, situations. People with this core skill are best fragmented and fast-growing economies. positioned to deal with the complexities of making and marketing products for consumers across Asias diverse, fragmented and fast-growing economies. Learning agility is the key to maximizing the changes going on in Asia, and dealing with these new complexities, added Tseng.
Figure 3
> Mental agilityability to examine problems in unique and unusual ways > Self-Awareness extent to which an individual knows his or her true strengths and weaknesses
> People agilityskilled communicator who can work with diverse types of people
Learning agility
> Change agilitylikes to experiment and comfortable with change > Results agilitydelivers results in challenging firsttime situations
You have to manage your talent like a portfolio. Different types of talent will result in different kinds of yields for an organization. Some represent a future dividend, and some a more present dividend.
Pushp Gupta
Managing Principal, Korn/Ferry International
Retaining talent
According to attendees at the Leadership Transformation conference, the top factors that worked best in engaging and retaining key talent in their organizations were: > Compensation and benefits > Development opportunities > Employer brand > Great work opportunities > Quality of leadership > Recognition
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 multinationals hard. MNCs, however, are widely viewed as offering better development programs, an area that global companies need to promote and make good on. Johnson & Johnson took steps to raise its profile as an employer of choice through university and MBA recruiting, highlighting the career and training potential, according to AlvarezCalderon. Research has shown that 10 percent of development comes through training, 20 percent through coaching, and 70 percent from experience. Johnson & Johnson has a strong e-university platform and coursework model in place to take care of the training; the next step in China was to work with front line managers to foster coaching and mentoring skills. We believe that focusing on the front line manager is key to making this 10-20-70 formula work. Its about the interaction, the coaching, and the feedback that happens after the skill building is done. We are spending a lot of time on this, said Alvarez-Calderon. The company also put a robust assessment program in place to map out employees competencies and skills. Janssen then created rotational assignments for high-potential employees to ensure they had a chance to develop and grow. Transparency and visibility of career opportunity is a critical part of how we build our team at J&J, Alvarez-Calderon added. Ignoring high-potential talent development is particularly risky in Asia right now; not only is there competition for talent, but the global slowdown will push individuals into the most secure jobs with the best future prospects.
Attendees biggest focus in the areas of engaging and retaining talent were: > Career pathing > Coaching > Development opportunities > Employee engagement > Employer branding > Employer value proposition > Greater collaboration > Internal communication > Leadership effectiveness > Onboarding and mentoring > On the job stretch > Succession planning
Figure 4
Figure 5
25% 18%
17%
17% 13% 7% 7%
Dow Chemical, for one, had to work hard on this after it acquired Rohm and Haas in 2009, making it the worlds 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 businesswas 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 Chemicals 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. We need a strong general manager capability: they need to be experts in their field, grow the business, lead with vision and passion, and have the ability to manage a team and motivate them, and drive collaboration at the same time, said Kee. The company also wanted to increase the number of Asian managers who can better connect with local markets. Dow Chemical is now in the process of creating a GM development curriculum to accelerate the learning of this core group. Because they are a very senior targeted group, we recognize that their development needs may differ. Each one has different gaps. Our plan is to focus on their unique, individual development needs, Kee added. 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 thismore than payhelps attract and retain high-caliber staff in Asia today.
Figure 6
Benchmark business and country leaders against industry best-in-class Customize development curriculum to meet individual leader's improvement needs.
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. Dow is also putting a company-wide leadership effectiveness survey into play, which will ultimately hold managers accountable for developing their leadership skills. Were two years into our transformational journey, but were starting to see success. Im already hearing leaders say OK, I have to take this on board. The company is serious, said Kee. Two years ago, Este Lauder Companies in APAC, gripped by the need to prepare the next generation of leaders, and to cope with the growth strategy of the region, created a leadership development program that was so successful that its being taken to other regions by the company. "With a challenging need to raise the skills of our leaders, and build a strong pool of ready successors for the sustainability of the organization, there is a real sense of urgency," said Figin Seng, regional director of learning and talent development, APAC, for Este Lauder Companies. We can buy capabilities and borrow people from other regions and New York, but this isnt sustainable. In two to three years time, we may need to replace a number of key leaders. We need to build from within. Este Lauder Companies, together with Korn/Ferry, created an intensive nine-month transformative leadership development program that its APAC future leadership teamincluding all the brand general managers, heads of departments and unit directorsmust go through. So far, 60 of 180 senior managers have completed the course, with another 80 embarking on the learning journey this fiscal year. It's a steep investment: it costs $15,000 to $18,000 per personincluding design and course fee, travel and accommodation, project expensesbut its already paying off. Three of these leaders have already progressed to more senior roles on the back of the program, and several role rotations have taken place to cross-pollinate top talent. Its a very tough journey, according to Este Lauders Seng. But weve created interest, buy-in, and thirst. People want to get involved now. While one of the core challenges companies in Asia face is creating an Asian leadership team with a truly global outlook and skillset, another challengeparticularly for Japanese companiesis globalizing a Japanese-dominated team. Sony Electronics, for one, has worked hard to diversify its senior management team in the Asia, Middle East and Africa region.
We can buy capabilities and borrow people from other regions and New York, but this isnt sustainable. In two to three years time, we may need to replace a number of key leaders. We need to build from within.
Figin Seng
Regional director of learning and talent development, APAC Este Lauder Companies
Sonys 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 worldthey 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 bulk80 percenton training, with just 10 percent on deployment and 10 percent on coaching.
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Leadership development needs to be a lot more strategicand 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. Its not hard to find a situation to test a leader: learning experiences are everywhere, said Gillespie.
In Asia, we have such an opportunity to develop leaders. Its not hard to find a situation to test a leader: learning experiences are everywhere.
Jacqueline Gillespie
Managing Principal, Korn/Ferry International
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