Leaders Tough to Find in Asia

Once known strictly as a low-cost labor hub, Asia is now an ever-growing service-based economy. While the workplace is changing fast, its managers -- whether expats or locals -- need plenty of improvement.

By Jared Shelly

Imagine being a manager at a large company in an Asian country -- let's take China, for example. It might test your patience to supervise a younger employee who continually asks about his or her career progression.

Or it might test your diplomatic skills, considering that employees take particular offense to being reprimanded -- even gently -- in front of others, as one of their top priorities is to "save face."

These distinct cultural norms, coupled with a language barrier, surely make it tough on expat leaders.

But locals don't have it all that easy, either. Many in emerging Asian economies don't quite have the business acumen of their Western counterparts, yet they are dealing with a burgeoning economy that only recently began shifting from a low-cost labor hub to a service-based one.

Korn/Ferry International says Asia used to be the "workshop of the world," but now is "poised to drive the world's economic growth in the wake of the global financial crisis," according to Asia 2.0: Leading the Next Wave of Growth in Asia.

That's quite a transition -- especially since it's happening at warp speed. (It took the United States 50 years to make that change, but it is taking considerably less time in Asia.)

Such progress comes with a price, however -- fledgling leadership.

"Only a small fraction of [native-born] executives and managers in the region currently have what it takes to succeed in this markedly different environment," according to the recently released report by the Los Angeles-based executive-search firm.

It identifies 10 weaknesses of Asian leaders: personal learning, dealing with paradox, managing through systems, motivating others, developing others, strategic agility, creativity, innovation management, conflict management, and managing vision and purpose.

Certainly expats can help manage Asian enterprises: They're a known commodity and usually have plenty of business acumen.

But expats are expensive. Mike Norman, senior vice president of Sibson Consulting in Los Angeles, estimates that it costs three to five times more to employ an expat than to hire a local employee.

And Norman, who has several clients in the region, notes that expats at multinational companies have their own sets of challenges. The language barrier is perhaps most glaring. An expat might be able to speak English with a few direct reports, but communication drops off as you go down the levels of an organization.

"That poses some challenges to the expat, because of translation and whether or not his or her messages are getting through and cascading around the organization in their intended fashion," says Norman. "It's difficult to check interpretation and understanding in real time."

It's especially difficult for expats who have responsibilities that are region-wide, since different countries have different sets of cultural and workplace norms. The work culture in Singapore, for example, is different from that in Japan or China.

Norman also warns that relying too much on expats can hinder the development of locals.

"You don't want positions that people naturally aspire to being held by expats and then suffering unwanted turnover because people can't see a career progression," he says.

Expats, especially from the West, tend to speak frankly. That just doesn't work in Asian countries, where managers need to use much more finesse and allow workers to "save face," something Norman calls a primary concern.

Erik Duerring, director of consulting services atDevelopment Dimensions Internationalin China (and an expat from Pittsburgh), says Western managers in the Asia often "lack humbleness and lead with a strong sense of superiority."

Asia-based companies should focus on "growing local leaders like crazy," Duerring says because of that attitude as well as the view that expats are seen as "short-term inconvenience" because many represent stumbling blocks in the upward movement of locals.

Specifically, companies should emphasize coaching, setting performance expectations, delegation, influencing and managing performance problems.

Well-designed management-trainee programs in Asian locations last approximately three years, followed by advanced training for another three, says Duerring. Training programs, combined with a well-defined career track develop skills and increase retention.

?The key is to hook young leadership talent into the organizational fabric across those six years of differential development and career opportunities,? he says.

Such programs are more effective when they are supported by corporate leaders in the West, and when there are systems in place to measure progress of the management trainees.

But it is challenging, says Duerring, because HR is stretched too thin and has much less of a presence at the executive table in Asia than in the West. In addition, Asia-based HR professionals often lack the necessary sophistication for conducting leadership needs-analyses to build a comprehensive training program.

Developing local leaders is still a better plan than relying on expats, however. That?s not to say that multinationals should just leave expats out of the equation. They can be a great resource to help develop local leaders, but it's a mistake to rely too heavily on expats to run the business.

"Dependence, over the long term, on the expatriate is a strategic error," says Norman. "I don't see organizations going in with a long-term expat incumbent strategy, unless it's just absolutely required by the business."