human capital insights book (march 2015) - chapter

Human Capital Leadership Institute (HCLI)

The Human Capital Leadership Institute (HCLI) is an aggregator and neutral player in the human capital ecosystem. HCLI offers the unique ability to bring together multiple perspectives and voices from business, government and academia, offering thought leadership and insights on understanding Asia, successfully doing business in Asia and its implications on leadership and human capital strategies for Asia. Through its efforts, the Institute aims to develop global leaders with a strong understanding of leading in Asia, as well as to build Asian leaders with the ability to lead on the global stage.

HCLI is a strategic alliance between the Singapore Ministry of Manpower (MOM), Singapore Economic Development Board (EDB) and Singapore Management University (SMU)

For more information, please visit www.hcli.org

The last decade has seen an unprecedented shift in economic focus from the West to the East. To keep in step, the Human Resources function has also turned its attention to Asia, trying to accomplish the twin objectives of accelerating functional maturity and adapting people practices to suit regional requirements. Western HR practices in most Asia-based organisations are slowly but surely giving way to people solutions developed in Asia. The Asian Human Capital Awards (AHCA), jointly organised by Singapore’s Ministry of Manpower (MOM) and the Human Capital Leadership Institute (HCLI), has identified and celebrated successful people practices in Asia for the past five years. These are compelling stories of innovative solutions developed to address HR challenges that organisations face in Asia. Human Capital Insights is a compilation of 24 such stories woven into five themes--HR-Business Processes, Learning & Development, Talent Management, Employee Engagement, and HR Technologies. This book is a humble and honest attempt by HCLI to energise the HR ecosystem in Asia and facilitate collective learning. It also offers unique insights to global HR leaders who wish to know more about the human capital landscape in this vibrant part of the world.

Human Capital Insights

Inspiring Practices For Asia, From Asia

HumanCapitalInsights

I n s p i r i n g P r a c t i c e s F o r A s i a , F r o m A s i a

Human Capital Leadership Institute





















A Global Asian Talent Pipeline

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viewpoint.{ }A GLOBAL ASIAN TALENT PIPELINE:

ROLE OF REGIONAL Human resourcesby Sunil Puri,

Head of Research, Human Capital Leadership Institute

Talent management refers to the anticipation of required human capital for an organisation and the planning to meet those needs.10 Broadly defined, it could include everything

done to recruit, retain, develop, reward, and make people perform, and it is a part of strategic workforce planning. In the context of a fast-growing and emerging Asia, talent management not only includes recruiting-to-retention initiatives, but also focuses on strengthening the overall pipeline of leaders coming out of Asia. This emerging cadre of talent that we call “global Asian leaders” can both lead businesses in Asia and—more importantly—bring an

10 Carpenter, Mason, Talya Bauer, and Berrin Erdogan. Management and Organizational Behavior. 1st ed. New York: Flatworld Knowledge, 2012. Print.

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Asian perspective to global teams. However, they are in short supply. This chapter attempts to make a business case for developing global Asian talent, highlights key stall points that regional Human Resources (HR) faces in this journey, and “hats” it needs to wear to strengthen the pipeline of this critical talent.

While most businesses see Asia as a long-term prospect, and are investing in physical infrastructure and economic assets, few are focusing on developing the most critical lever that could make the Asian growth dream a reality: leadership talent. According to a 2012 McKinsey survey11, just 2% of the top 200 employees in global companies are located in Asian emerging markets. Given that these markets are likely to account for one-third of sales over the next few years, this is a looming issue for Multi-National Corporations (MNCs). The majority of regional Chief HR Officers (CHROs) are aware of this impending problem, yet they currently face more immediate talent issues that revolve around recruitment, retention, development, and engagement. Forward-thinking organisations are, however, investing disproportionate time and effort when compared to their competition to stay ahead of the curve in the global Asian leadership development race.

What maKEs dEvEloping gloBal asian lEadErs diFFicult?

The Organisation for Economic Co-operation and Development (OECD) projects that Asia will grow at almost 7% over the next five

11 Dewhurst, Martin, Jonathan Harris, and Suzanne Heywood. “The global company’s challenge.” McKinsey Quarterly. McKinsley & Company, June 2012. Web. 4 Feb. 2015.

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years12, and predictions that the region could become the world’s largest economy (by gross domestic product contribution) by 203013 do not seem idle speculation. This growth is leading global organisations to anticipate that Asia will drive the top line over the next decade. This anticipation is pushing regional HR to not only accelerate the maturity of talent practices in the region, but also create a robust pipeline of global Asian talent. Regional HR, however, is caught amidst key concerns around availability of the “right raw material” for creating leaders (i.e., entry-level talent), organisational biases vis-à-vis developing regional talent, and ability and aspiration concerns in potential Asian leaders. Figure 1 highlights the three possible key areas that make it difficult for regional HR to develop global Asian leaders—country environment, company environment, and employee-related challenges.

Country environment concerns revolve around the stage of economic development and the market size of countries. These two factors limit the quality of talent joining the workforce as well as the level of investments large Western MNCs are willing to make to develop local talents. Beyond large Asian markets like China, India, Indonesia, and perhaps the Philippines and Thailand, MNCs may be reluctant to invest resources to develop managerial talents. MNCs operating in smaller markets in Asia may find it more feasible to adopt a build-buy-borrow strategy. Specifically, they might rotate key talents across these markets or second expatriates from the home office to run operations in these markets.

12 Economic Outlook for Southeast Asia, China and India 2014: Beyond the Middle-Income Trap. OECD Publishing, 14 Nov. 2013. Web. 4 Feb. 2015.

13 Zakaria, Tabassum. “U.S. intelligence sees Asia’s global power rising by 2030.” Reuters Edition, 10 Dec. 2012. Print.

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Figure 1: Root Cause Analysis of the Global Asian Leadership Development Issue

Source: Human Capital Leadership Institute Research 2014

Why is it hard to develop global Asian leaders?

Country environment concerns

Company environment issues

State of development*

Small market size**

Company’s business

model

Company culture issues

Lack of CEO’s

commitment

Lack of skill

Lack of will

Using Western

lens for Asia

“Expat” driven

mindset

Short-termstrategy

Mainly local market driven

Leader may be a “misfit”

Lack of knowledge

Skills are hard

to teach

Not required in

home country

Mobilityconcerns

Lack of confidence

Areas where Regional HR can make a difference

Notes:* Country may be underdeveloped leading to inadequate supply of talent** Country may have a small market size leading to inadequate interest by global organisations to develop global leaders

Employee related challenges

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Company environment issues can be understood from the perspective of the firm’s business model. Some MNCs operating in Asia may adopt a home-market-driven strategy with Asia being considered a pilot office or an outpost. The limited scope of business coupled with a short-term vision for Asia could hamper the desire of some MNCs to develop local Asian talent. Furthermore, some MNCs may also have a biased view of Asian talent, thereby perhaps using the “wrong lenses” to evaluate local talents; for instance, focusing solely on English proficiency. Lastly, country leads of MNCs may not have the “inclination” to develop local talents. Country leads may have been parachuted into Asia to build the business or set up a plant, so his or her focus may not be on people development.

Employee-related challenges centre around the lack of abilities of Asian talents to develop certain skill sets necessary for leadership positions or the lack of personal aspiration to build global career paths.

What can rEgional human rEsourcEs do?

Human Capital Leadership Institute (HCLI) research points at four “hats”, or critical roles, regional HR must wear to overcome the stall points in developing a robust global Asian leadership pipeline. These are highlighted in Figure 2.

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Figure 2

Source: Human Capital Leadership Institute Research 2014

CREATING GLOBAL ASIAN LEADERSTHE ‘HATS’ REGIONAL HR NEEDS TO WEAR

ONE

TrusTedAdvisorWork with globalbusiness and Hrto ensure global Asian leadership stays on the agenda

TWO

PAssioNATeAdvoCATePartner with internal business functions to cre-ate opportunities for emerging Asian leaders

THREE

iNNovATiveMArKeTerPosition overseas roles as attrac-tive, career-ad-vancing moves for high-poten-tial Asian leaders

FOUR

AsTuTeFACiLiTATorevaluate and plug global leadership competency gaps on an ongoing basis

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• Trusted Advisor—Ensure Asia’s talent agenda remains top-of-mind for key internal stakeholders.

• Passionate Advocate—Create opportunities for Asian talent to get the experience required to step into global leadership roles.

• Innovative Marketer—Position global roles for Asian leaders as both attractive and career-advancing.

• Astute Facilitator—Continuously help talent develop the necessary skill sets such as being comfortable with discomfort, creating internal and external networks, and being able to adapt authentically to succeed in a global role.

These roles are diverse, and cover multiple functions. Excelling at them all is no easy task. Regional HR teams in Asia therefore need to ensure that they can deliver in each aspect.

trusted advisor to key stakeholders

Although regional HR needs to drive Asia’s leadership agenda, the mandate to create more global leaders often rests with headquarters. So, unless the corporate business plays a big role, local business or regional HR is likely to fail in the pursuit of building a global Asian leadership pipeline. While business leaders may appreciate the long-term benefits of developing a global Asian leadership pipeline, they also have to meet more immediate business targets. This is where regional HR needs to step in. Regional HR must speak the business language, understand metrics critical to business, be a part of the annual planning, and tie business plans to the leadership agenda.

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Practitioners suggest that regional CHRO may need to play the role of a “myth-buster” for the global leadership to dispel the myth of a capability gap in Asian talent, which may be attributed to widely held misconceptions—particularly in the West.

passionate advoCate oF asian talent

Regional HR needs to passionately pursue an Asian leadership agenda. Regional CHROs may use their one-on-one check-ins with global leaders to highlight the emerging talent in their country or region. In a way, the regional CHRO needs to put his or her talent on the global business and HR radar screen. The creation of talent committees of Asian business and HR leaders may therefore help overcome the lack of awareness over today’s pressing need to create Asian leaders.

To get around the problem of relocation, regional HR needs to aggressively push the option of certain global roles being based in Asia. However, if an organisation decides to run global roles out of Asia, regional HR needs to guard against instances of such roles being filled by expatriates. This is where the CHRO needs to act as a passionate advocate, by advancing the advantages of employing Asian talent in Asia-based global roles.

innovative marketer oF gloBal opportunities

If there is one thing that can derail the development of global Asian leaders, it is concerns that Asian senior executives—especially in Singapore and China—have about relocating overseas. Successful

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global leaders need to have overseas experience, but it is hard to urge leaders out of their home country. They may not be comfortable with moving overseas. Common concerns that senior executives have centre around missed opportunities in their home country; potential local roles after their global stint; anxiety at being away from the extended family; and adjusting to the new country’s lifestyle. Executives’ concerns are not always just limited to the physical relocation. There could also be genuine compensation adjustment issues. For instance, Singapore executives moving abroad would have to adjust to higher tax rates.

So what can HR do to “market” global roles more creatively? The options include subtle interventions, such as positioning global roles as career advancements, to more practical approaches, such as creating a clearly defined “path” for leaders to return home after a global rotation, or practically assessing compensation and benefits offered. Regional HR can also leverage the power of storytelling to motivate their in-country leaders to pursue global career paths.

Perhaps the biggest concern amongst senior executives is ensuring that they will eventually be posted back to their home country after their global rotations. To address this, regional HR needs to work jointly with their organisation’s leadership to realistically project future business scenarios in the country or region and evaluate what leadership opportunities may open up.

Regional HR also needs to get creative around relocation options for a global role. Rather than just offering a three- to five-year relocation, ideally there should be multiple options on the table. These options could include an “extended business trip option”, where a leader

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would remain in his or her current location and manage the region through frequent business trips; or a short-term expatriate option, which entails a brief relocation, often without moving the family.

astute FaCilitator oF gloBal skills development

According to HCLI research, there are three qualities that separate a great global leader from a successful in-country leader:14

Comfort with Discomfort—Successful global leaders seem to not just tolerate discomfort, but embrace it. They do not let ambiguity cripple them. Instead, they recognise the need to act decisively even without processing complete knowledge of the situation. They realise that learning from a poor decision is still better than not making any decision at all.

Judicious Relationship Building—Relationship building is important to drive business growth. But it is more important to discern the right partners. It is necessary to build relationships with internal partners on both sides of the headquarters-local affiliate divide, in order to holistically champion the global organisation’s goal.

Authentic Adaptation—While cross-border leaders should learn to adapt their behaviours, they should stay authentic to their cultural roots. Completely assimilating into another culture robs global leaders of their unique differentiators and value to their organisations.

14 “Building Global Leaders in Asia: A Focus on Singaporean Talent.” HCLI Insights. February (2014): 5. Print.

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Regional HR can either make these attributes a prerequisite and build them into the selection process, or take steps to plug these gaps in an Asian leader’s experience or skill set.

conclusion

Owing to Asia’s anticipated contribution to global companies’ top line, regional HR functions suddenly find themselves in the spotlight. While regional HR teams ramp up talent practices in Asia to match global standards, business heads are increasingly expecting HR to create leadership talent that can both lead in Asia and represent the region in the global arena.

To deliver results, regional HR may have to overcome constraints due to uneven economic development, organisational biases, and individual ability and aspiration. In this journey, heads of regional HR may have to wear multiple hats—trusted advisor, passionate advocate, innovative marketer, and astute facilitator.

A word of caution, however—regional HR needs to tread a fine line between “pushing” Asian talent into the global leadership pipeline and infringing upon the important value of meritocracy within an organisation. It may want to guard against elevating Asian leaders even though they may not be ready, thereby setting them up for failure.

human capital insights book (march 2015) - chapter

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