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Leading Across Borders – Playing Global, Staying Asian

HCLI Research

Published 12 September 2012

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Many companies in Asia are keen to globalise and yet stay Asian. A lot will depend on their ability to develop global leaders from asia. HCLI organised an executive roundtable to understand Asian insights on leadership across borders.

By 2020, McKinsey predicts that Asian companies will account for 40% of the top 250 firms globally. This is a 70% increase from the current situation in 2012. Similarly Ernst & Young is forecasting that Asia’s direct foreign investment will rise sharply, essentially doubling from about US$200 billion in 2012 to around US$400 billion in 2020. The signs are clear. Asian’s top companies are no longer content to dominate their domestic markets and they are now looking to become regional and global players. And yet, the biggest constraint to their internationalisation efforts could be a lack of cross-border leadership talent.

A recent study by Egon Zehnder International and Singapore’s Human Capital Leadership Institute (HCLI) indicated that building a pipeline of leaders capable of succeeding across borders was one of the top business priorities for Asia-based CEOs.

HCLI’s mission is simple – to develop insights and solutions that help companies in Asia build global leaders. To this end, the institute has embarked on a range of research initiatives to better understand this topic.

Most recently, we assembled an executive roundtable featuring senior business leaders from some of Asia’s most successful companies, in order to shed light on how companies can better identify and develop global leaders from Asia.

Unraveling the DNA of leaders across borders

The institute asked the roundtable participants to describe the DNA of successful leaders across borders. Whilst these leaders represented diverse countries and industries, there was a high-level of consensus in the key characteristics of such leaders. Below is a summary of these three qualities:

1. Comfort with Discomfort

Leading across borders can be a challenging experience for many businesses. The realisation that the same leadership style that brought success in one’s home market may not work in another can be unsettling. To succeed across borders, it helps that leaders possess curiosity, positivity and perseverance.

Dr. Astrid Turminez shares a poignant childhood story about growing up in squalid neighbourhood in the Philippines. Under the light of her kerosene lamp, she spent hours reading Time magazine and dreaming of far-flung places like Russia and New York.

Likewise, Katsura-san talks about observing and inheriting his father’s unadulterated curiosity. He recalls watching his father buying and disassembling complex machinery, simply because he wanted to understand how they worked. Curiosity may be a starting point, but leaders across borders need both positivity and perseverance to ensure that they stay the course.

Anand Pillai talks about his realisation that leadership growth stems from discomfort, and how he actively seeks new challenges and experiences for himself and his team.

David Wong introduces the concept of “change at the right pace”, and the need to patiently identify and seize opportunities as they emerge. Successful cross-border leaders seem to not just tolerate discomfort and ambiguity, they seem to embrace it. They do not let ambiguity cripple them. Instead, they recognise the need to act decisively even without possessing complete knowledge of the situation. They realise that learning from a poor decision is still better than not making any decision at all.

2. Judicious Relationship Building

It is well-recognised that in many parts of Asia, the ability to nurture strong relationships is important. This is even more critical when leading diverse teams or when operating in foreign cultures. The ability to establish trust, overcome cultural misunderstandings and build alliances can become an important competitive advantage. In high-growth Asia, the pressure to build and harness relationships to drive business growth quickly can be strong.

However, the participants at our roundtable cautioned about the need to first identify the right type of partners. Indeed, forming strong relationships with the wrong type of partners can backfire. In an extreme example, associating with partners that engage in corrupt practices can undermine one’s reputation in a new market.

Hence, leaders need to display judgement in identifying the right partners. It behooves leaders to take their time in collecting information and being judicious in terms of which individuals and companies they choose to forge partnerships with. The ability to observe, listen and learn are important factors not just in selecting partners, but also in understanding how leaders should adapt their behaviours in different countries.

3. Authentic Adaptation

Perhaps the most striking find from the roundtable was the consensus that to succeed across cultures, it is critical to first stay true to your own cultural roots. Whilst it is important to learn to adapt one’s behaviours, we should also stay authentic. Many of the participants cautioned about the risks of “going native” or total assimilation to another culture.

While total assimilation may have been a viable or even desirable twenty years ago, it is no longer feasible in today’s multi-polar and interconnected world. Executives today are rotated to different geographies much more frequently, and are increasing tasked to lead diverse teams across different continents. More fundamentally, completely assimilating to another culture robs the executive of his unique differentiator and value to the organisation.

As the article by David Wong (Bank of China) indicates, his greatest value to his company stems from his ability to drive change in a patient manner. As a Singaporean, he had a more direct communication style, and was more familiar with Western management style than most Chinese. This allowed him to be a constructive agent of change, as his company became more globalised – serving both Chinese firms going global as well as clients from the West. As companies are beginning to realise, cultural differences should not be managed away. Rather, it should be recognised, celebrated and leveraged.

To manage this balance between adaptation and authenticity, it helps to have strong self-awareness. Leaders need to understand the core cultural values that one should hold constant, as well as the leadership behaviours they have to adapt across cultures.

The art and science of identifying leaders across borders

Understanding the characteristics of leading across borders is one thing – being able to accurately measure and assess those characteristics is another matter. Factors like “being comfortable with discomfort” or being able to “authentically adapt” are not easily quantifiable. Yet, it is an important topic. Before companies decide on how to develop cross-border leaders, it helps to understand who has the greatest potential for success.

The participants at our roundtable believe that identifying leaders across borders is both a science and an art. It requires the systematic collection of data but also the use of intuition and informal networks. There is an array of techniques to help companies assess the potential to lead across borders. These include psychometric tests like the “Cultural Intelligence Scale” (by the Cultural Intelligence Centre), “Intercultural Awareness Profiler” (by THT Consulting) and “Global Mindset Inventory” (by Thunderbird School of Global Management).

While these tools can provide useful information, it is important to use them in conjunction with other data points like performance appraisal and assessment centre data. Assessment centres – which allow organisations to use multiple techniques and assessors to evaluate targeted behaviours – are especially promising. The use of simulation exercises, for example, allows assessors the chance to evaluate effective cross-cultural behaviours within environments that replicate some of the complexity and ambiguity in the real world.

Whilst there is a lot we can learn through scientific techniques like psychometric tools and assessment centers, we should also not neglect the art of assessing the potential of cross-border leaders. The participants at our roundtable suggested three practical tips.

1. Know your grapevine

Experienced leaders understand that the informal grapevine can be a rich source of information about prospective talent. Being able to solicit honest feedback from multiple sources will help business leaders obtain a more holistic picture of the strengths and gaps of their talent pool.

Observe how your people treat the wait staff at restaurants. Do they take the time to acknowledge, interact and thank them?

2. The waiter test

It is relatively easy to display constructive behaviours in front of one’s superiors. It is much more challenging to display these behaviours consistently with one’s peers and direct reports. Indeed, the participants at our roundtable believe that leaders can learn a lot about how their people treat others – especially those lower in status than them. Observe how your people treat the wait staff at restaurants. Do they take the time to acknowledge, interact and thank them? Or are they only focused on you?

3. Be skeptical

Be prepared to question your initial assumptions on who has the greatest potential to lead across borders. Be aware of what psychologists have described as the “confirmation bias”. We all have the tendency to want to want to be right about our people decisions. We then unconsciously seek out information that confirms our initial thoughts and ignore contrary information. Challenge yourself: What are the gaps of your preferred candidates? Have you missed out people whose potential to lead across borders have not yet been uncovered?

Developing cross-border leaders

While it is helpful to improve our ability to assess leadership potential, the fact remains that Asia needs to develop many more leaders across borders. We asked our participants to share their insights on what works in terms of accelerating the development of cross-border leaders. Their view was unequivocal. Quite simply, the best way to develop cross-border leadership capability is to send high-potentials on international assignments. There is no substitute to learning by real-world experience.

Research by HCLI and others have consistently demonstrated that accelerated development occurs through experiential learning, rather than classroom-based learning. While many companies employ international assignments, not many do this well. Poorly designed assignments can backfire. For example, our participants cautioned about setting quotas or making such internal assignments mandatory. Getting the buy-in of the host country is critical, as is selecting the right candidate for such international assignments.

Another common problem is the failure to help prepare employees – as well as their families and host organisations – for international assignments. How can organisations help overcome these common pitfalls? What can organisations do to maximise the positive impact of international assignments? Our participants shared some insights as per below.

1. Start early

Many of our participants also argued that the companies should send their high potentials overseas early in their career. There are many reasons for doing this.

First, younger employees are less likely to have family commitments such as school-going children and aging parents. This is especially important in Asia, where family and social factors can be strong barriers to mobility. With less personal obligations, younger employees are likely to have greater appetite for international assignments.

Second, the costs associated with failure are lower earlier in one’s career. International assignments are great learning platforms, but also contain significant risks of failure. The benefits of learnings from such failures can outweigh the costs inherent in making mistakes – especially if these failures happen early in one’s career.

Third, younger employees may be more malleable and such international assignments can be instrumental in shaping their leadership styles.

2. Be flexible

A perennial question is how much “stretch” to introduce in these international assignments. Should high-potentials be sent to challenging assignments in countries very foreign to their own? Or should there be a more gradual process of acclimatisation, where employees are sent to countries that are relatively similar to their own?

Janet Chang suggests that many Korean companies prefer the former approach. In her research, she points out that it is not uncommon for Korean managers to be sent to foreign countries on short notice. Interestingly, these managers are not encouraged to bring their families as to minimise distractions. The assumption here is that hardship is a precursor to leadership growth.

In contrast, Indonesians seem to favour a more gradual process of acclimatisation. Yaya Junardy – who is the President Commissioner of the Rajawali Corporation and a former CEO of IBM Indonesia – remarked on the pivotal experience of working for a foreign supervisor early in his career. This exposure allowed him to adapt his communication style, which has helped him in subsequent international assignments.

Another gradual approach worth exploring is the ‘hub and spokes’ model. High potentials can first be sent to regional “hubs” before moving on to more challenge locations. Singapore and Hong Kong, natural bridges between East and West, are popular destinations for such regional hubs. Usually the Asian headquarters for many multinationals, these locations also offer another advantage: high potentials can better understand and absorb the organisational DNA before they venture into a market further from the buzz of headquarters.

3. The value of “den mothers”

High potentials need mentoring to help them overcome the inevitable challenges faced in their cross-border journeys. The participants at our roundtable called these special mentors “den mothers”. Taking this term from the Boy Scouts, a den mother is one who serves as a supervisor of a Cub Scout den. Translating to a business context, den mothers are mentors who help cross-border leaders in the clarifying expectations, navigating the implicit aspects of foreign cultures, and honing their leadership skills.

Hence, aside from the supervisor (who focuses more on business objectives), it is important to have den mothers who can serve as advocates and sounding board for these high potentials.

An ongoing journey

Our journey to uncover and synthesise insights on leading across borders is just beginning. We hope that these insights will prove useful to organisations as they grapple with the challenge of developing a global talent pool from Asia. If we hope that others apply these insights, it is only fair for us to do the same. Can we demonstrate “Authentic Adaptation”? Can we incorporate insights from around the world, whilst retaining our core belief that there are valuable insights from Asia worth distilling and showcasing? Can we engage in “Judicious Relationship Building”?

Distilling and showcasing Asian insights on global leadership is an audacious goal. Can we identify and engage leading organisations and researchers on this shared quest? Can we display “Comfort with Discomfort”? Asia is a tremendously diverse region and also one that is experiencing rapid change. If we believe that diversity is the lifeblood that drives intellectual capital, then there is no better place to study global leadership.

This article was first published in HQ Asia (Print) Issue 04 (2012).