Given the scale and size of the markets in Asia and the need to establish deep roots, it is unsustainable in the long run to rely on expatriates to lead an organization’s growth in Asia. Ms. Rebecca Siow, Head of Research and Insights at the Human Capital Leadership Institute (HCLI), a Singapore-based think tank with expertise in leadership development in Asia , points out that not only is expatriation costly for a company, but a homegrown local leader has the relational equity and local networks, often required in many parts of Asia for doing business, that an expatriate leader does not.
According to Ms. Siow, it is important for organizational leaders in Asia not only to understand the local culture – which can vary greatly even amongst neighboring countries – but also be comfortable with navigating the higher degree of ambiguity and volatility that surrounds the developing markets in much of Asia.
Investing in talent development
The HCLI was set up as a strategic alliance between the Singapore Ministry of Manpower, Economic Development Board and the Singapore Management University in 2010, as a response to this trend. The Institute strives to help companies develop their Asian leadership pipeline through its research, publications, networks as well as flagship and customized executive development programs and knowledge-sharing events. Since its inception, many global MNCS and listed companies in Singapore and the region such as MasterCard, Hitachi, Tencent and the Development Bank of Singapore (DBS) have seen their executives pass through its doors.
For other companies who prefer to keep their executive training in-house, Singapore, cited as “a gateway to the rapidly growing Asian economies”, is a favored location for “corporate universities”, dedicated leadership development and executive training centers, set up by MNCs. Companies that have set up such facilities in Singapore include global insurance, consumer goods and financial services firms such as AXA, UBS, Sony, Unilever, UBS, Deloitte and Visa.
Establishing a corporate campus often requires considerable capital and is a learning and development (L&D) investment indicative of the company’s commitment to the region. For example, consumer goods giant Unilever’s leadership development center in Singapore is a sprawling 2.3-hectare complex and cost a hefty US$65m to build. This level of commitment to region specific talent development is understandable when Asian markets account for almost 40% of the firm’s global revenues.
Similarly, for payments technology company Visa, which expects many of the digital trends shaping the world to emerge from Asia, launching its first international campus of Visa University at its Asia Pacific headquarters in Singapore makes lots of sense. In a press release by the company on the opening of its Singapore campus in September last year, its Asia Pacific Group Executive commented that “the Visa campus in Singapore will provide opportunities to help the [Visa] team keep their digital and leadership skills up-to-date and razor sharp”.
Change traditional mindsets to retain talent
Investment in L&D must come hand in hand with a retention strategy. According to the HCLI, there is still a need for global companies to “develop a stronger connection between commitments and action”, and this refers to change from within.
Research cited by the HCLI in a piece by CEO Wong Su-Yen, indicates that "global companies find it hard to hire senior leaders locally because they are looking for employees like the ones they have at home, based on traditional skill sets and educational achievements”.
Ms. Wong goes on to stress in her article that “successful companies will instead strive to create a company culture which cultivates local talent."
According to observations by Deloitte Consulting, as talent from emerging markets are becoming more discerning, companies must develop country-specific talent strategies and HR programs in order to retain their local talent. This goes beyond investment in L&D and includes, but is not limited to, country-specific compensation and benefits, an environment that allows access to global colleagues and global mobility opportunities, and new organizational structures and career paths that are more aligned to the particular cultural values of the country or region.
Outside the company, government policies and a national discourse that facilitates creativity and innovation, risk-taking and inter-cultural exchange and openness, as well as adaptability to different environments, is also a necessary ingredient to help grow global Asian leaders for the future.
All this will not happen overnight, and companies must evolve not only their environment and structures but cultivate the attitudes of their existing and future leaders. Ms. Siow believes that senior leaders have a tremendously important role to play as “mentors, coaches and sponsors” to their younger counterparts, and that companies need to mold success stories of Asian leaders to inspire future generations of leaders. This also includes removing barriers between peers and superiors, encouraging mentorship and authentic relationship building, and creating opportunities for next generation leaders to step up and take risks.
Long-term development and retention of talent must become a priority for companies looking to expand or remain competitive in Asia. These businesses can no longer afford to ignore their talent strategy in the Asian emerging markets or they will eventually lose out to local firms. The good news is: Asia is ripe with talent ready to shine.