Calypso Consulting

(A version of this article appeared in Chinese in CHO Magazine in June 2009)
 
Why does China need leaders more than any other country?  What is special about China that makes this a crisis rather than just a normal business need? 
There are two answers.  One is demographic and the other is cultural.  Demographically, China forfeited an entire generation of possible business leaders during the Cultural Revolution in the 1960s.  People who would now be at the age to be in charge of Chinese firms spent many of their formative years in the countryside learning the agrarian way of life.  Business, as we know it today, was shunned.  While Westerners were sowing their oats in college and then landing their first jobs that would become the beginning of long business careers, their Chinese counterparts were toiling in the fields.  When the Cultural Revolution ended, some of these people entered the work force, but they entered into a planned economy where market forces played no part.  There was no need to learn the things leaders need to know today to be successful.  As a result, we now have an older work force in China that was never groomed in a market economy. 
The younger generation in China dominates the work force.  An average estimate is that the Chinese employee is 10 years younger than a person holding a comparable job in the West.  Most people who are asked to lead have no experience in leading and very little experience in being led.  This problem will solve itself in a few years as the population ages and the current crop of managers gain valuable experience.  But until that happens, China will continue to have a leadership shortage.
The cultural answer is more complex and will not necessarily be resolved quickly. 
Short-Term Focus.  Every public company in the world has short-term worries.  But in China the preoccupation is greater than most other places.  Multi-nationals have bosses in other countries who often believe that China is a place to maximize profits today.  Costs are still relatively low.  The mindset is to squeeze the most from the stone now while it is still possible.  Local firms have a different reason for the short-term focus – survival.  Without the deep pockets of the multi-nationals, locals must be sure to capitalize on whatever economies they can today so that they can still be around tomorrow.  With such a short-term focus, whether you are a multi-national or a local, many long-term efforts, like leadership development, often take a back seat.
Lack of Know-How and Experience.  While all of the multi-national firms in China have leadership development expertise in their home countries, few have adequately transferred that expertise to China.  In the case of local firms, there never has been much experience developing leaders through formal programs.  As such, there are not enough people in China who know how to do this well.  Therefore, leadership development often gets allocated to outside consultants, if it gets done at all. 
Lack of Talent Internally.  Chinese employees are among the brightest and hardest working in the world.  But they are so young!  Many Chinese managers have only a few years of work experience before they are asked to lead people on the job.  Most have not even been mentored themselves and yet, they are then forced to lead others.  While this is a short-term problem, the need today is great.  Until these future leaders “grow up,” there will continue to be a lack of internal leadership talent in China.
For Chinese leaders, the challenge is to be more open to the development of the best and brightest in the firm.  You may be able to teach someone to swim by throwing them in the water and letting them fend for themselves, but you can be much more efficient if you give them swimming lessons.  The same goes for business leadership.  If we just assume that the best leaders will figure it out on their own, we are wasting valuable time and valuable human resources.  An investment in future leaders is an investment in the company that will pay back with large dividends.  It is not a choice.  Chinese companies cannot afford to wait for leaders to develop naturally.  If current Chinese leaders take this approach, they will surely lose to their competitors who will simply recruit this valuable talent and make them leaders in their companies.
If foreign leaders can be more understanding of Chinese ways and if Chinese leaders can be more open to using Western leadership development practices, we can go a long way in meeting the leadership challenges that China offers.