By Ajay Soni, Leadership Practice Leader, Asia Pacific, and
Nidhi Singh, Senior Consultant, Talent & Leadership Practice, India

The emergence of Asian companies on the global stage has dramatically changed the nature of Leadership in Asia Pacific and has exposed organizations to a new arena of competition. The results from Aon Hewitt's 2009 Top Companies for Leaders study points toward a flux in leadership dynamics around the globe. While American and European companies historically led the market in attracting, retaining and developing leaders, our 2009 research results portrayed a different picture. Asian companies are moving at a much faster pace than their Western counterparts in developing their leaders, with India at the forefront of this trend.

Leadership development in Asia is more aggressive

As a result of Asia's sharp increase in growth after the global downturn, organizations in Asia are facing multiple challenges, including shortages of executive talent, increased expatriate costs, an increased demand for qualified local executives, and a greater need for leadership training. Our research shows that organizations in Asia are not shying away from managing the complexities of this "new economy" and are moving aggressively to develop and prepare the next generation of leaders.

During an interview for the Top Company for Leaders study, the CEO of a large Indian organization told us that, "During the recession, we optimized costs and cut excess flab in various sections of our organization. We even took a cut in our compensation; however, one aspect that we did not compromise on was the investment in developing our Leaders and top talent. Twenty-five percent of the reduction in compensation was ploughed back into strengthening our leadership pipeline, as we felt that this was one area where an investment would help us come out of the downturn."

Such bold and decisive moves are propelling Asian companies toward faster growth and helping them attract, build and retain a continuous pool of high potential talent. The study highlighted several ways companies in Asia Pacific are achieving this goal.

Recruit fresh talent. The study found that 100% of the Top Companies in Asia Pacific have a specific strategy for selecting leaders from outside as well as within the organization. The Head of an Asian multinational company (MNC) mentioned, "We consciously recruit 25% of our leadership from the outside as we want to be prepared to manage the changing culture that our organization (and most other Asian organizations) are experiencing due to globalization and our aggressive growth plans. If we did not do so, we would soon fall behind the growth curve and be caught unaware. Today, such talent strategies are no longer just desirable or optional rather, they are mandatory for the survival of our firm."

Nurture top talent. All of the Top Companies in Asia Pacific reported having a sufficient talent pipeline to be successful in the future, compared to just 50 percent of all other Asia Pacific companies. Rigorous assessment, continued development, and consistent communication across levels result in pipeline depth. Almost 83% of the Top Companies have sufficient numbers for their Middle Management levels, demonstrating the emphatic thrust given by these organizations to building this layer that is critical to drive strategy and lead the implementation goals.

During our CEO interviews with one of the winning organizations of the study, the top executive at the firm mentioned, "Leadership development is so much a part of our culture that we do not think of it as a discrete activity, but rather how it is linked to the way we do strategic and operational plans. Each year, we spend two weeks reviewing our leadership pipeline and discussing 300 of our top talent, including their performance, potential, and careers." Companies such as GE, IBM, and P&G have a long tradition of CEOs and senior leaders spending a disproportionate amount of time on leadership and treating the development of the firm's highest-potential leaders as a personal responsibility.

Develop through experience and exposure. Leadership development programs and succession planning are the first priority for the Asia Pacific Top Companies for Leaders. In addition, leadership assessment and coaching are seen as increasingly important. These companies drive development by not only focusing on specific corporate programs, but also by striving to fulfill the individual's comprehensive developmental needs. Today, leadership development is multifaceted and holistic, rather than a point-in-time intervention. The development strategy for leadership is a mix of classroom training sessions and action learning programs strengthened by high-powered coaching and cross-functional practical experience.

The speed at which the Top Companies in Asia Pacific develop their high potential and critical talent is a significant differentiator in their Leadership Development strategy, as compared to other companies in the study. Creating a cross-domain/division visibility for high-potential talent is a practice that is fast becoming popular. This is being done by generating consistent and varied opportunities for high-potential employees to interact with the C-suite executives outside their current function. This not only creates stronger networks within the organization, it also promotes higher visibility of talent outside of their immediate workspace and supervisors.

Use branding as a leadership talent magnet. Ninety-two percent of Top Companies in Asia Pacific, compared to just over 38 percent of all other Asia Pacific companies, report being very intentional in their efforts to build a reputation for strong leadership. Today, leading organizations are not only focusing on top leadership talent, but also are focusing their efforts to build and develop a robust leadership pipeline at the middle management levels. The managing director of a global "Top Company for Leaders" remarked, "We no longer look at our Leadership Development strategy on a year-on year basis, nor do we focus only on the C-suite of executives. We formulate our top talent strategy as a five-year plan that is closely aligned to the five-year Business strategy of our organization. Any organization that is serious about growth at a global level would probably be following the same practice."

Bridging the gap

Charles Darwin once said, "It is not the strongest of species that survives, nor the most intelligent; it is the species that is most adaptable to change." While Asian organizations have proven to be most aggressive in terms of sustained leadership development, they still need to bridge the gap in four areas if they are to truly become a global player.

First, Asian leaders need to "unlearn" the leadership style that made them successful in a local market. A global, multinational and diverse employee pool requires and looks forward to a leadership style that is effective and equally powerful across geographies.

Second, Asian leaders need to be prepared for sudden organic changes as a result of their aggressive global acquisition strategies. Leaders will need to start managing operations that increase in complexity, size and culture.

Third, Asian leaders will need to have firm succession plans in place, which are communicated and carried out in a systematic manner. Asian firms today might have very strong leaders, but they need to reflect upon whether they have equally powerful stalwarts as successors to drive and sustain this growth in the long term.

Lastly, Asian Leaders will need to become global ambassadors for their firms by not only contributing to the multifold growth of their firms, but also to the society, at large. Today, very few Asian leaders are recognized globally. Asian leaders must demonstrate and create a larger impact on the global economy and society. If not, Asian firms and their leaders will continue to have only regional visibility and global success for them, will remain at best, an elusive dream.

Contact us

Ajay Soni is the Leadership Practice Leader, Asia Pacific, at Aon Hewitt. Ajay can be contacted at ajay.soni@aonhewitt.com. Nidhi Singh is a Senior Consultant with Aon Hewitt's Talent & Leadership Practice. She can be reached at nidhi.singh@aonhewitt.com.