Emerging Market Leaders Should Give
Up Some Power
Attracting and retaining talent is one of the top
priorities for emerging market executives. To succeed, yield some intellectual
leadership to the front lines.
Emerging market leaders have their work cut out
for them. As investment-led growth now dries up, leaders in the emerging world
are looking to grow and lead organisations based on productivity, innovation
and best practices. But it is the sector’s three major challenges: corruption,
policy and talent, which are keeping emerging market leaders awake at night and
dominating discussions at industry events, such as the recent INSEAD Emerging Market Conference.
Of the three, the most challenging is talent.
Leaders often complain of shortages, mismatched skillsets or the constant
demands of a restless workforce seeking greater pay and greater say. With a
lower median age in emerging markets, millennial attitudes are becoming more
prominent and are set to challenge emerging leaders as much, or even more, than
those in developed markets. Many now realise that the answer to the challenges
facing them rests on how this workforce is managed.
“There are very few large organisations in Asia
today that are truly innovative,” said Henrik Bresman, INSEAD Associate
Professor of Organisational Behaviour and a panelist at the recent conference.
This is down to the fact that “there is a reluctance to let go of power at the
top.” Leaders, he insisted, must learn to “distribute leadership tasks to
wherever the best information and capabilities reside.”
Intellectual leadership
Other panelists agreed. Grant Kelley, CEO of
Singapore-based City Developments shared how he motivates his mostly young,
dynamic Singaporean workforce. “You need to provide intellectual leadership to
a modern executive”, he noted, adding that “ultimately, your duty as a leader,
no matter where you are is to develop home-grown talent. Companies succeed best
when they’ve got a local pipeline of leadership and a succession plan that is
robust.”
As Elaine Yew, Managing Partner at Egon Zehnder,
explained, “Emerging market customers increasingly want to see local leaders.
Until recently, many expatriates have filled the top jobs. That’s changing as
companies realise that a leader may be transformational in one setting but
completely different in another”.
For foreigners leading in emerging markets, Yew
emphasises the importance of cultural sensitivity and adaptability – not
relying on institutional models and formulae that work at home. While
this is true for leaders everywhere, there is a heightened need in emerging
economies.
Long-term commitment
Corporate leaders must realise that for their
organisations to grow, they must also assist in institution building, and
partner with governments to solve the social problems of the markets they are
operating in. Ganesh Natarajan, Vice Chairman and CEO, Zensar Technologies said
noted that, “We need business leaders in emerging markets who have the
interests of the local economy at heart. Only then can emerging economies
succeed.”
As Bresman pointed out, this presents an
opportunity for leaders to capitalise on eager talent that is increasingly
interested in doing social good. He points out that in his study on millennials, “leaders of this generation want to be seen as
specialists but they want to lead in the context of collaboration in a team…so
if the future of leadership is collaborative, then Asian millennials are well-placed
to take on these roles”.
This served as a fitting solution to Julie
Kozack, IMF economist’s call for stronger, institutional growth. “The kind of
easy, and in some cases, credit-fueled growth that emerging markets have
experienced seems to have come to an end,” she said. “Looking ahead, growth
will be dependent on reforms and institution building.” Panelists agreed that
leaders would do well to take part in fostering a better environment and
working directly with government to build standards for a more conducive long
term business environment.
To do this leaders need to perform beyond their
corporate targets. They need to demonstrate long-term commitment to these
markets and use their intellect and expertise to assist with the development of
the institutional framework and societal fabric of their host countries.
Without this cooperation, the shortfall of these basic environmental aspects
will soon become a roadblock to continued business success. Even today, the
best designed office building in Gurgaon, India, or Jakarta, Indonesia, opens
up to a road full of potholes. Until developers of these buildings start taking
ownership of at least the last kilometre of road that leads to their offices,
progress in emerging markets will not reach its true potential.
Delegating power
This all means leaders need to open their minds
and their hearts to their younger workforce. While panelists advocated
delegating more power to the front lines of rising emerging market firms, they
acknowledged the difficulty, especially in Asia, of giving others intellectual
ownership in a region where the boss historically is supposed to have all the
answers.
Yew says among the leaders she’s coached, four
magic words can go a long way to achieving better relationships and empowering
others: “What do you think?” “In those words you’re inviting diversity of
thought, you’re empowering and we are collectively problem‑solving. And the
best part? You don’t have to say “you don’t know”, she said.
At the same time, when it comes to technology,
the youngest member of the team probably knows more than the boss. It is
important to handle this proactively and in fact optimise it for success. I
remember the former CEO of Unilever in India, Nitin Paranjape, mentioning that
he had one of the youngest managers in the company “mentor” him on technology
aspects. When the top manager of the company acknowledges that he still has
learning to do and when leaders take on direct accountability for providing the
opportunities required for developing future leaders, then companies can better
meet the needs of their talent and their organisations in emerging
markets.
Vinika Rao is the Executive Director of INSEAD’s Emerging Markets
Institute
Read more at http://knowledge.insead.edu/blog/insead-blog/emerging-market-leaders-should-give-up-some-power-4505?utm_source=INSEAD+Knowledge&utm_campaign=a17fe79cf2-Feb_11_Mailer2_11_2016&utm_medium=email&utm_term=0_e079141ebb-a17fe79cf2-249840429#sCKLmVFSmVK0vxzX.99
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