Gaps and Promises of Chinese Talents Leading Multinational Corporations


China became the largest recipient of Foreign Direct Investment in the world this year despite the slower pace of economic growth.  Along with it, the demands for talented professionals increase as well, from sales and marketing, human resources to research and development.

In order to better balance cost, experience and local market knowledge, multinational corporations (MNC) are making strides to identify, train and promote local Chinese talents to serve the China market. According to the Hewitt 2010 Expatriate C&B Study, in 2007, 25.8% of multinationals in China replaced expatriates with local candidates. In 2010, the number nearly doubled to 45.7% and another 14% have plans to do so.

 In the 2010 survey conducted by the American Chamber of Commerce in Shanghai, foreign enterprises list "Developing a Leadership Pipeline" as the number one strategic business challenge in the next 3-5 years. This was followed by challenges such as increasing market share and product and service innovations.  

 

So what are some of the gaps that companies find in local Chinese talents, especially at the level of mid to senior level positions?

  • Master of English as business language. Although all Chinese hires to multinational corporations possess basic English language skills to conduct daily business, many are not proficient enough to effectively discuss complicated issues with English native speakers.
  • Familiarity of headquarter corporate culture. The majority of local hires have never been to the western offices of MNC's. They are unfamiliar with the corporate cultures and western business practices that are essential for them to be effective leaders in a global company.
  • Communication skills in a global corporation.Besides language proficiency, business conduct norms and cultural differences can prohibit Chinese managers to effectively communicate, persuade and effect changes working with their international colleagues and clients.
  • Strategic thinking and planning skills. Local Chinese managers tend to be younger in age and have less managerial experience. They are further identified as being not as strong on critical thinking skills and strategic thinking skills. This has much to do with the education system in China where respect for authority is highly emphasized.

In the past 10 years, leadership programs inside multinational corporations in China have become more systematic, more sophisticated and more result-oriented than they used to be.

  • In-Sourcing

Before, companies typically outsourced the entire design and delivery of training and leadership development programs to outside consulting firms. Now, they hire designated personnel to design the programs together with the outside consulting firms. They are putting more emphasis on customizing the programs and aligning them with their own corporate strategies and objectives.

  • Diverse Design and Delivery

Besides the traditional lecture format, programs are now consisting of a combination of elements such as lectures, real project involvement, simulations and overseas office rotations. Working on real business problems allows participants to quickly apply theoretical learning from the classroom. Overseas rotations give them exposure to the corporate culture, and helps establish relationships with key internal stakeholders.

  • Include Retention as KPI

Given the highly mobile nature of the Chinese work force, one of the key objectives for leadership development programs is talent retention. Successful programs include retention as a KPI (Key Performance Indicator) and are measured strictly against it. But KPI alone is not enough. Companies must also deliver, not just promise, career progressions such as promotions, to top performers as part of the leadership development programs.

As China rises in sales, market share and the strategic importance for multinational corporations, local talents in China may one day not only manage the China market, but also take on more global leadership roles. Significant gaps exist today to achieve this vision. But the increasingly sophisticated talent pool inside China, coupled with companies' strategic and systematic approach to leadership development programs, bring promises to the realization of this vision in the future.  

 

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