New countries new leadership Pinar Akkaya Montreal HR Congress

New Horizons New Countries, New Leadership

Pınar Akkaya

Signature Consulting

Emerging markets are becoming the new centers of gravity for the global economy: Countries that were once the source of low-cost manufacturing are now becoming attractive consumer markets.

84% of world’s population.

2000 to 2010 > 96% increase in income levels in emerging markets. 45% further until 2016.*

Sources 1.International Monetary Fund, “2012 World Economic Outlook Database,” October 2012, 2 .UN Conference on Trade and Deevelopment, 2012

By 2015, 26% of the global economy.

Real GDP growth is twice faster. By 2030, 70% of world GDP growth will come from emerging markets.

From 2000 to 2011, FDI in emerging markets nearly tripled: USD 684 billion. And in 2012, FDI in emerging markets surpassed that of developed economies. (**)

the emerging markets represent big business.

80% of the world workforce is employed in emerging markets.

are emerging markets true lands of opportunities?

there are challenges, too.

Robust Informal Economy, Bureaucracy, Corruption

High Vulnerability, High Volatility

High Diversity, High Variation

Culture and People Issues

New Game, New Rules

An increasing number of roles become international.

No more centralization vs decentralization > Network organisations that are more responsive and proactive respond better to the needs of emerging markets.

Flexible structures replace rigid structures.

Emerging Markets Change the Game.

Fundamentals

Speed. “In emerging markets, there is no luxury of time.” When

business is growing by double digits each year, speed is critical for success in these emerging markets. You have to be agile in your actions and decisions.

Flexibility. In emerging markets, one size fits none. Companies may

have to vary products, services and business models even within the country. The challenge is to create appropriate solutions in emerging markets that are as efficient and relevant as in mature markets.

Transparency. In emerging

markets, the need for transparency is greater than ever. You should set your expectations in a realistic way and be transparent about your reason of existance, your business results, your expectations from the market and your KPIs.

Cultural fluency. Every culture offers its own set of

opportunites and challenges. You should look for ways to read this culture well, with all its dynamics and adapt your business, your management and your communication.

Local workforce. Local consumers want tailored

products and services. A local workforce will have an innate understanding of these.

HR environment

In the India, IBM hires a new employee every 5 minutes.

For P&G, the average age of emerging market leaders is late 20s to mid 30s.

In 2004, Nokia had 250 employees in India.Today, that number is nearly 15,000, an increase of nearly 6,000 percent in 10 years.

GE attrition rate in China runs around only 11–12%, but the talent pipeline remains one of their biggest challenges.

50% have difficulty in filling key positions (1Q2011 Talent Watch ). “Lack of available local talent” is the leading barrier to business growth. (1)

77% cited supply of experienced leaders a barrier to growth (2)

80% in China reported severe talent shortages, particularly for leader roles. (3)

In 2030, China will be confronted with a lack of 20M employees. (4)

Sources 1.Multi-Polar World: Rise of the Emerging-Market Multinational, Accenture, 2008) / 2. Organisation Solutions Study, China / 3.Hewitt Best Employers in Asia study / 4 World Economic Forum Report

Available talent of experienced leaders is thin however, the demand is increasing.

How companies recruit, retain and manage people across the entire organization will often determine their success or failure in emerging countries.

Leadership gap. Unprepared people assuming higher level of positions. Unexperienced leaders who have never lived through such market dynamics.

The corporate dilemma

Corporate dilemma

How to source talent? Locally or globally?

Whom to choose? Local leaders? Expat leaders?

FACT> Emerging market leadership role is not a comfortable chair to sit, no matter where the leader comes from.

Volatile economic conditions

Infrastructure and supply chain issues

Talent supply shortages

Changing legal and regulatory environments

Government relations

Lack of resources available in larger BUs

...

FACT > Leadership skills are less transferable than we think.

Different countries, different ways of doing business.

Some characteristics of a leader may not be appreciated as a good leadership characteristic in another country due to cultural differences.

People’s expectations of how leaders should behave vary across countries.

The team that supports the leader can become a critical factor when the leader changes place.

A copy-paste approach would not work, this can trap the leader into the failure.

FACT > «Western» leadership stereotype leads the way.

We need a new leadership model for emerging markets.

We need leaders who have multicultural understanding and a global vision.

We need to build leaders who are capable of thinking globally and acting locally.

We need to turn “leaders” into

“global leaders”.

Because global leadership management is a driver of global strategy of a company.

The «global leadership» model requires a different set of competences...

... built on 3 pillars.

Lead self

Lead the team

Lead the business

These three pillars are not independent of what we have just covered here.

Growth

Potential

Complexity

Environment

Lack of leadership talent

HR Challenges

A new model

Global leaders

New competencies

New leadership

New Game

A holistic model

CORE LEADERSHIP COMPETENCES

EMERGING MARKET LEADERSHIP

COMPETENCES

Lead self

Lead the team

Lead the business

Local power and initiative

A compelling vision

A global mindset

Ability to manage complexity

Flexibility

Maturity for the role

Act with speed and agility

Ability to drive growth

Lead the business.

Ability to «unlearn»

Creating meaning and a common purpose

Appreciating diversity

Building trust, giving inspiration

Ability to build a strong upper management

Sharing leadership

Ability to «build» a team

Nurturing future global leaders

Social skills

Communication

Lead the team.

Cultural intelligence&fluency

Self-awareness, emotional intelligence

Ability to manage stress

Engagement

Integrity and high level of ethics

Adaptation

Curiosity

Change awareness

Ability to speak languages

Lead self.

“Bring your mind.... and your heart to the office.”

http://thechairmansblog.gallup.com/2014/10/why-being-engaged-at-work-isnt-as.html

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