Asia 2.0 : Leading the Next Wave of Growth in Asia

Transcription

1 Asia 2.0 : Leading the Next Wave of Growth in Asia Singapore January 2011

2 Asia 2.0 a new way to grow A new breed of leadership Building a pipeline of Asia 2.0 leaders 2

3 Asia 2.0 a new way to grow 3

4 Asia has recovered quickly from the crisis but the new world is different While Asia s growth before and after the financial crisis looks fairly secular China India Asia US EU Source: IMF, World Economic Outlook, April 2010 ADB, Momentum for Sustained Recovery, 2010, Korn/Ferry Analysis Domestic demand and domestic capital formation are now the key drivers of growth India (2009) China (2009) Capital Formation Consumption Net Exports -5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 4

5 Asia s growth model is shifting MARKET SHIFTS ASIA 1.0 ( ) THE IMPETUS FOR CHANGE ASIA 2.0 ( ) CONSUMER SHIFT MADE IN ASIA - Reduced Western Consumer Spending - Emerging Consumerism in Asia MADE FOR ASIA INNOVATION SHIFT THE WORLD S FACTORY and BACK OFFICE - Shifting R&D investments - Asia s drive to innovate - Asia s need to move up the value chain THE WORLD S LABORATORY and KNOWLEDGE OFFICE - Unemployment in the west JOBS SHIFT CHEAP and PRODUCTIVE WORKFORCE - Western companies Asianizing - Asian companies globalizing CREATIVE and INNOVATIVE TALENT 5

6 THE CONSUMPTION SHIFT from MADE IN ASIA to MADE FOR ASIA Asia s middle class is growing at an incredible pace, leading to the creation of a global consumer class at lower reaches of the income pyramid % of the world s middle class (population and spending PPP 2005) THE DISCRETIONARY CONSUMPTION UPSIDE IN ASIA Consumer Spending (2007, USD billion) 21% 30% Clothing & Footwear Electronics Alcohol & Tobacco House-hold Goods Recreation 54% 28% 66% 64% 23% 59% Population Asia N. America + EU Spending Source : The New Global Middle Class: A Cross-Over from West to East, Homi Kharas and Geoffrey Gertz, WolfensohnCenter for Development at Brookings, 2010 US India China (India + China) as a % of US 29% 10% 22% 17% 5% Source: NY Times, Euromonitor, 2007, Korn/Ferry Analysis. 6

7 THE INNOVATION SHIFT from THE WORLD S FACTORY to the WORLD S LABORATORY # of Basic (Domestic) Annual Patent Filings Forecast 500, , ,000 Japan China overtakes Europe China to overtake Japan China to overtake US 200,000 US China 100,000 Europe Korea Source : Thomson-Reuters, Patented in China,

8 THE INNOVATION SHIFT THE BRAVE NEW WORLD OF INNOVATION FROM ASIA Tata Nano: the $3,000 car was conceived and developed in India LG LX9500 : the world s first 3D LED TV Mac 400 : a hand-held cardiogram ($800) developed by GE in India Kaohsiung Stadium : World s first solar powered stadium in Taiwan The USB Credit Card : developed by ShinhanCard in Korea EkoHybrid: World s first hybrid 2-wheeler ($500) in Bangalore F1 Night Race : World s first night race in Singapore Harmony Express: World s fastest train (394 kmph) in China 8

9 THE JOBS SHIFT FROM A CHEAP LABOR FORCE to CREATIVE TALENT High end, knowledgeintensive jobs will move to Asia, faster than labor-intensive back room jobs The Economist, Special Report on Emerging Markets, April 2010 Business Week reported a doubling of the proportion US MBA students moving to Asia from 5% in 2008 to 10% in With stubborn youth unemployment levels in the US and ongoing need to talent in Asia, this trend is likely to continue. TALENT CATEGORIES IN DEMAND R&D AND INNOVATION HIGH END TECHNOLOGY AND PROFESSIONAL SERVICES GLOBAL LEADERSHIP AND GOVERNANCE IMPLICATIONS for ASIA China alone is home to more than 1200 foreign invested R&D centers, creating more than 150,000 high end, knowledge intensive jobs in the country over the next 3 years. Major multinationals like IBM, Accenture, and Cisco are working aggressively to place leaders in senior regional / global roles into China. Investment banks are trying hard to find talent for senior roles in China, but the talent pool is incredibly shallow As regional HQs continue to shift to Shanghai and Beijing, there is an increasing need to place leaders in high profile international roles in China. Local companies like Huaweiand Haierare aggressively looking for senior talent for global leadership roles 9

10 The JOBS Shift Western Multinationals are rapidly shifting global / international JOBS to Asia ABB Group: Global robotics business HQ to Shanghai (2005) Cisco Systems : 2 nd global headquarters in Bangalore (2006) Honeywell : Electronics Materials Business HQ to Shanghai (2007) Standard Chartered Bank : Global Private Banking HQ to Singapore(2008) Rolls Royce : Global Marine Business HQ to Singapore (Mar 09) Medtronic : Medtronic International HQ to Singapore (Dec 09) Paypal: Paypal International (non-na) HQ to Singapore (Feb 10) HSBC : Chief Executive moves to Hong Kong (Feb 10) Thomson Reuters : Global Investment and Advisory to Asia (Mar 10) Wynn Resorts : actively considering moving global HQ to Macau (Apr 10) 10

11 A new breed of leadership 11

12 Asia 2.0 a new leadership challenge The intensity and prevalence of 2.0 challenges will call for a different set of leadership capabilities for success. Strategy Execution Customer Product Skills Team and Culture 16 Asia 1.0 Challenge Replicate / customize an existing strategy to a new market context Scale up a proven execution platform with limited localization Service established customer segments and needs Position / re-position an existing proposition in the addressable market Build / scale up a highly productive workforce with good technical skills Build the discipline of performance and results in a culturally homogeneous team Asia 2.0 Challenge Craft a strategy to generate new growth in an un-served market Develop a new execution platform that can be scaled in new and diverse markets Build insights on new customersand un-met needs in the market Use disruptive innovation to create new categories of products / services Build and groom a diverse and international poolof talent with creative skills Build a high performance team in a global, multi-cultural environment 12

13 Asia 2.0 leaders will lead with multi-focus (nonlinear) thinking Leadership challenges with an Asia 2.0 bias will require a new set of leadership capabilities and styles. Single Focus Responsive EXECUTOR Clear Directive Open Informal Source : Korn/Ferry Research Task focused Productive ENERGIZER Humorous Adaptive Logical Serious Multi Focus CONTROLLER Data - driven Thorough INTEGRATOR Inquisitive Collaborative Involving Patient Deliberate Asia 1.0 Leadership: success depends on singleminded focus on plan, execution and task Asia 2.0 Leadership : success will depend on ability to handle multiplicity, diversity, and cultural differences 13

14 The Asia C-Suite is still 1.0 focused Indian and Chinese senior leaders show a more task-focused, more hierarchical, more socially distant style compared with successful global executives PRIMARY STYLE SECONDARY STYLE LEAST USED STYLE Global Best in Class (n = ) ENERGIZER INTEGRATOR EXECUTOR Chinese C-Suite Executives (n=100) EXECUTOR CONTROLLER ENERGIZER Indian C-Suite Executives (n=99) CONTROLLER EXECUTOR ENERGIZER Source : Korn/Ferry Research Successful global executives in the above sample are not just western, there are several Asian and Latin American passports in that sample. 14

15 The Asian Talent Market for 2.0 Readiness The odds of finding 2.0 ready talent in both the top executive level and the next level (managers) is low across Asia, with the only bright spot being India, with 9% readiness. % readiness (based on 2.0 leadership styles) in Asian FINALIST CANDIDATE pool n (Executives) = 1246 n (Managers) = 642 Clear Strength in Asia 2.0 Some strength / can be developed Less developed for Asia 2.0 CHINA (Executives) 1% 16% 83% CHINA (Managers) 1% 10% 89% INDIA (Executives) 9% 21% 72% INDIA (Managers) 8% 13% 79% REST OF ASIA (Executives) 5% 19% 76% REST OF ASIA (Managers) 4% 19% 77% Source : Korn/Ferry Database of Finalist Candidates in Live Searches over last 12 months 15

16 The Leadership Skills that Comprise 2.0 Readiness The traditional strengths of Asia Leaders helped them succeed in1.0, and the traditional weakenesseswill stand in the way of 2.0 success Critical for Leadership Success in Asia 1.0 Critical for Leadership Success in Asia 2.0 Equally important for Asia 1.0 and 2.0 Top 10 Strengths of Asian Leaders Action Oriented Perseverance Drive for Results Approachability Boss Relationships Customer Focus Integrity/Trust Ethics and Values Functional /Technical Skills Intellectual Horsepower Top 10 Weaknesses of Asian Leaders Personal Learning Dealing with Paradox Managing Through Systems Motivating Others Developing Direct Reports / Others Strategic Agility Creativity Innovation Management Conflict Management Managing Vision and Purpose Source : Korn/Ferry Database of Leadership 360 Assessments in Asia 16

17 Building a pipeline of Asia 2.0 leaders 17

18 THE DEVELOPMENT CHALLENGE Accelerating the development speed by a factor of 5 Global Best in Class Supervisor Profile Global Best in Class Director Profile 7-9 years In world class leaders, this development journey takes 7-9 years. In Asia, companies will need to accelerate the development of leaders to cover this journey in 1-2 years. Matches Asia 1.0 Leader Profile Matches Asia 2.0 Leader Profile Executor Energizer Controller Integrator Source: Korn/Ferry s research using Leadership and Thinking Styles assessment 18

19 A new development paradigm is needed for Asia 2.0 organizations How executives learn 25% of skills learnt through HARDSHIP How companies spend on development today 0% on HARDSHIP SUPPORT 70% from ASSIGNMENTS 20% from COACH / MENTOR 10% from TRAINING 80% on TRAINING 10% on COACHING 10% on DEPLOYMENT Sources : Korn/Ferry Lominger Study 19

20 TALENT MANAGEMENT for ASIA 2.0 A new way of thinking and new thought-ware to execute HOW TO HIRE WHAT TO ASSESS WHAT TO DEVELOP HOW TO DEVELOP CAREER GROWTH Asia 1.0 thinking Fit with current job specifications Educational background Experience profile Competence Performance Managing Skills Rational Thinking Technical skills Training On the job learning E-learning Functional/ linear Uni-dimensional Local Asia 2.0 thinking Fit with future leadership needs Diversity of experience Behavioral profile Leadership Style Learning Agility / Future Potential Leading Skills Self-awareness Emotional Competence Apprenticeship Structured Challenges / Stretch Assignments Continuous Feedback and coaching Internal networking Cross-functional career Multi-dimensional International 20

21 COPYRIGHT 2010 Korn/Ferry International. ALL RIGHTS RESERVED. 21