Leadership and Talent Challenges in Asia. It’s Different.

Posted on November 24th, 2014. Filed Under: Business Trends, Human Resources, Leadership Development | Tags:
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I recently completed a tour of Asia (Singapore, Hong Kong, Tokyo) and met with dozens of Human Resources and business leaders. It was a fascinating trip and I want to share a few thoughts.

1. Leadership Gaps Abound, and yes, Asian Leaders Behave Differently.

It’s easy to generalize about Asia (economies are growing rapidly, nationalities vary widely, distances are long) but in many organizations the challenges companies face are similar or identical to those in other countries. I met with banks, hospitality companies, a few government agencies, and a variety of insurance and financial services institutions.

Most companies face tremendous leadership gaps. We did a workshop on high-impact leadership development in Hong Kong and most of the large organizations there are quite advanced in their thinking. Questions were interesting: Do competency models vary by country? Do we want to look for different leadership styles for different countries?  Can we effectively move leaders from place to place?

HR execs confirm that Asian leaders must have tremendous cultural agility and awareness. While the “capabilities” of leadership are consistent, styles must vary – leading to the need to build leadership locally.

As the figure above shows, there are differences in leadership styles by culture (here we tend to value the “rugged individual” style). So while core capabilities are the same everywhere, people agreed that style matters and cultural agility is key. 

One of the senior execs reflected that their younger staff are the most culturally agile and that differences in style are going away as younger workers grow up. Most Asian countries (with the exception of Japan) are young, so the modernization of the talent pool is taking place rapidly.

2. Culture and Communications Style Matters.

As many travellers know, different Asian countries have very different communications styles. In Hong Kong, a highly developed city/country with many expatriats, western cultural values mix with Asian.

In Japan, where the country is more homogeneous, people are very respectful, quiet, and harmonious in their communications. We had a hard time getting executives to share much information until we had time to go out for drinks and entertainment in the evening. Then, of course, we talked openly about the stress, high performance culture, and intense drive some companies experience.

I had a series of conversations with young business consultants in Japan and some were as vocal as young people I work with in California. When in a large workshop, however, they were mostly quiet and very respectful, somewhat hesitant to speak out in front of their peers. One individual told me that this reflects the culture of harmony and respect in Japan, but does not in any way diminish the intensity and energy of workers in that country.

3. Employee Retention is Critical.

We had a series of discussions with banks, insurance companies, hospitality companies, and a fast-growing high tech company about employee retention. Many expressed frustration that people are job hopping rapidly (every year).

Most HR leaders told me that they were focused on regular pay increases, review of compensation packages, and offer many forms of rapid career progression to encourage high performers to stay. The job market for business professionals in these countries is hot – one company told us they had to increase salaries by almost 10% per year to keep up.

As we’ve discussed in the Global Human Capital Trends research, young professionals are now highly mobile and Asians, in particular, are very willing to relocate or move to advance their career.

4. Use of Technology is Growing.

China, Hong Kong, Japan, and Singapore are countries with rapid growth and they have as much or more technology focus as in Silicon Valley, where I live. Almost every professional I met with had a new, larger mobile phone and when I discussed our research on “The Overwhelmed Employee” most agreed that our ability to personally manage technology is one of their biggest organizational challenges.

There are dozens of HR technology startups now located in Asia and people use tools like Whatsapp, Twitter, Viper, and others regularly. The tapestry of productivity tools there is different from the US, but there is no lack of interest or proficiency. (For example, most were not aware of Glassdoor.)

When we talked with companies about analytics, almost all the organizations were anxious to move more rapidly, so there is little fear of technology among HR organizations.

5. Traditional HR Teams That Need Modernization.

Largely because of the rapid growth of many companies in Asia, HR organizations in general are a little less sophisticated than in other locations. We conducted a workshop on High-Impact HR in Singapore and most of the organizations who attended are at what we call Level 2 (HR as a “service center” function). This reflects the rapid growth of these organizations and the fact that line leaders are mostly focused on recruitment and basic HR services.

In our High-Impact HR model we describe the four stages of HR (shown below). Most of the companies we talked with are struggling to move from Level 2 to levels 3 or 4, so we had many discussions about how to reskill business partners, create more agile centers of excellence, and integrate technology to facilitate HR’s role as a business consultant, not just a service organization.

Many of these companies also have more distributed, fragmented HR organizations – many of which grew up through acquisition. One of the Hong Kong manufacturers we met with has HR leaders and recruiters in every one of the companies they acquired over the last ten years, and they have been reluctant to consolidate or rationalize this structure because it would alienate the local leaders. A large Japanese company we met with has the same challenge.

While nobody wants to “give up” their local HR team, ultimately it is far more powerful to have networks of expertise and centers of excellence where HR teams can share technology, iterate and learn from each other, and share skills.

6. Focused, Smart, HR Leaders

Finally, I observed that most of the HR leaders we met were very business-savvy, very driven, and quite innovative in their thinking. These organizations are growing fast and dealing with rapidly changing demographics, so they are willing to try new ideas.

A major insurance company we met with, for example, is totally restructuring its business to change governance from a central command and control model to country leaders with P&L responsibility in each country. This is a radical change, so the company is totally re-engineering its performance management process, its succession process, and looking at new ways of assessing and developing leaders. This is a very successful company which understands that a change of this magnitude demands 100% alignment and focus from HR to support the massive change.

Several HR leaders concluded, after we discussed our High-Impact HR model, that the term “HR Business Partner” is becoming obsolete. I have to agree. After thinking about it more, I realized that the entire concept of HR being a “partner” to business is an anathema. We as HR leaders do not want to be business “partners,” we want to be consultants, advisors, and co-pilots. The passive nature of the term “business partner” has to go and we have to expect HR to take ownership for talent issues, hold themselves accountable, measure their results, and continuously improve. That is not a “business partner” role, that is a “business leadership” role. I rarely have this kind of conversation with US or European HR leaders, but in these Asian companies HR leaders were actively engaged in discussions about how to restructure roles and try new approaches which drive results faster.

Over the last year I’ve had many meetings with HR teams around the world, and everywhere I go there is an intense desire to deepen skills, learn how to better leverage technology, and think outside the box. Deloitte Canada, for example, is embarking on a major program to redesign the work environment – focused on improving employee productivity and consultant engagement. When we described this to companies here, most were taking notes and rapidly thinking about new ideas.

7. The Simply Irresistible Framework of Great Interest

Finally, the research I’ve been doing on employee engagement and retention is of intense interest in Asia. We will be publishing much more on this in the coming months, but the message is clear: companies here (as in most other parts of the world) should think holistically about their entire work environment if they want to compete for top talent.

While I don’t like to generalize about countries, people, or any other parts of HR, it is clear that businesses in Asia are very focused on talent issues, looking for new ideas, and business-oriented in their talent strategies. For those of you who have not had the opportunity to visit one of the major Asian cities, I highly recommend it. You will experience diversity, business growth, and a dynamic business climate that inspires great work in HR.

More to come on this important topic, and I welcome stories and comments as always.

—–

About the Author: Josh Bersin is the founder and Principal of Bersin by Deloitte, Deloitte Consulting LLP, a research and advisory firm focused on corporate HR, talent management, leadership, and HR technology.

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Josh Bersin is Principal and Founder of Bersin by Deloitte, a leading research and advisory services firm in enterprise learning and talent management.

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