Asia is home to the world’s most promising business opportunities and accounts for one-third of the global economy. It seems logical that Asians would be leading economic growth in the region. Instead, IMA Asia’s Asia CEO Forum, which comprises leaders of large MNCs here, found that 80 per cent of its members were expats.
Experts are encouraging MNCs in Asia to take a second look at their leadership pipeline and grow the emerging leadership talent pool in Asia.
Why Asia needs Asian leaders
Asian leaders can enhance growth prospects by contributing a unique mindset and outlook to leadership, and offering insights into the region’s markets, cultures and dynamics.
When The Estée Lauder Companies Inc. decided to elect Morgan Stanley China CEO Wei Sun Christianson to its Board of Directors some years ago, it explained that the China-born investment banker’s “extensive financial expertise, strong business acumen and understanding of China” would be useful for the company as it continues to expand in the region.
With Asia being such a diverse market, MNCs also realise that it pays to develop talent with the right fit. Multinationals that have successfully built strong Asian leadership on the ground include GE, whose Greater China CEO Rachel Duan is driving growth for its healthcare business by helping it to meet the demands of an ageing population. She has been named by Fortune as one of Asia-Pacific’s Most Powerful Women. Another example is Kimberly-Clark Asia-Pacific’s president Achal Agarwal, the 2016 winner of CNBC’s Asia Business Leader of the Year Award, which recognises individuals for leading the way in disruptive innovation, talent management and corporate social responsibility.
Local talent has a deeper understanding of the work dynamic on the ground, says Sunil Puri, APAC Head of Research, Innovation and Product Development at the Center for Creative Leadership (CCL). He is interviewing more than 100 global company leaders for his research study The Global Asian Leader: From Local Stars to Global CXOs.
“Senior leaders point to the sense of humility which is so pervasive and evident here in Asia. Western MNCs trying to build businesses using the traditional approach of ‘cowboy’ leadership might not work in Asia,” Puri says. “Asian leaders bring the humility angle into western MNCs, an absolute must-have if you want to be successful in this part of the world.”
Ang Hock-Siong, General Manager Corporate Affairs at Makino, agrees. He says that for companies like his, there is an added layer of complexity because of the cultural diversity and differing pace of development in the markets where Makino is present.
Makino is a Japanese-based company with its headquarters in Singapore, but has established its business in places as diverse as Thailand, Indonesia, Vietnam, China and India.
“It is important to have managers who understand the language and the markets in order to manage the growth. We need local people to manage the business here and capitalise on opportunities,” says Ang.
Asian talent does need to ‘step up’
In the course of his research, Puri discovered that Asians scored well in some areas when compared to their Western counterparts. They were typically better at analytics and had a very strong work ethic, and could operate with ease in highly complex and volatile environments.
He admits, however, that Asians need to ‘step up’ and develop a number of competencies if they aspire to leadership positions in large multinationals.
“Asians must hone competencies such as courage of one’s conviction, the curiosity to learn new things, building trustworthy relationships and being able to influence decisions,” says Puri. “So from a supply standpoint, Western MNCs must make sure that executives from this part of the world are building these attributes, and invest in them to help them improve in these areas.”
Investing in Asian talent
So how can MNCs tap into the rich Asian leadership pipeline?
Ang, referring specifically to Singapore, recommends that companies run programmes to help develop the number of young Singaporean leaders, given the hot competition for available talent in the market. Quoting the example of Makino, Ang says that the company enrols up-and-coming managers in the five-day Graduate Management programme at the National University of Singapore and then places them in a three-month project to put learning into action. This is part of their initiative to retain and develop young leaders.
And many companies in Singapore are following suit – establishing in-house academies and enrolling managers in leadership training programmes to help young Asians develop the skills needed to walk into the boardroom.
Puri adds that merely having a leadership development programme in place is not enough. Companies must customise these programmes to account for the nuances in Asian culture.
“Companies that realise that business is conducted differently in this part of the world will tweak their leadership development tactics a little around the edges to be more effective,” he says.
Puri suggests that secondment or rotation programmes that take Asian leaders to the global headquarters are important to gain exposure to the executive leadership team. But he warns that MNC leadership positions come with a significant catch.
"If the talent is not mobile, unfortunately, that is a career killer in a MNC environment,” he says.
Puri points out that multinationals who voice commitment to greater diversity within the organisation send a conflicting message if this diversity is not reflected in the boardroom.
“If organisations really embrace diversity of talent in spirit, then you need to see the evidence at the top,” he adds.
Building a strong leadership pipeline for Asian talent is important to the company’s top line, where increased sales and engagement often means the difference between success and failure in emerging markets. And MNCs in Asia are fast learning that.