Research Report by Korn/Ferry Institute
Author: By Indranil Roy, Smart Growth: is Asia ready?
Boards and chief executives habitually say that leadership talent is among an organization’s most important asset. But it’s an asset that can be difficult to valuate or to deploy with complete confidence. Too often, talent shortfalls go undiscovered until symptoms become conspicuous: unmet targets, a dearth of innovation, sputtering growth.
In Asia, a sharp turn in market conditions has provided a remarkable laboratory to study the modulating effect that superior talent can have on businesses confronting a downshifting market. After about fifteen years of remarkable expansion (what we call the easy growth period), the region is now entering into a new, tougher growth environment – the smart growth period. For a generation of leaders who built their careers in easy growth conditions, the challenge will be to adjust to the new normal of smart growth – where demand is weak and change is furious.
CEOs are fast realizing that as growth disappears from markets around the world, the search for new growth will shift the focus to leadership: do we have leaders who can grow the business when the market is flat? Leveraging its years of research into the competencies, approaches, and personal attributes of best-in-class business leaders, Korn/Ferry International is constructing a new framework to answer this question.
This system is based on two statistically validated psychometric assessments. The first gauges maturity, which is the mark of a seasoned executive who can handle complexity, ambiguity, and large-scale issues.
The second, which measures Learning Agility, captures flexibility, resourcefulness, and the ability to tackle new and uncharted challenges. We believe a combination of these factors – particularly an aggregate of the top two tiers of leaders – predicts performance in driving top line growth, especially in an unpredictable business climate. For this first foray, we have looked specifically at the abilities that drive above-market growth rates for businesses in Asia.
Using Korn/Ferry’s science-based assessment tools, we were able to evaluate individual abilities with accuracy, and then benchmark collective results against the relevant industry or market. At the same time, we were able to pinpoint the skill sets that need to be developed in rising executives to enhance competitiveness of the enterprise going forward. A wholesale upgrade of talent, a confounding undertaking even in stable times, is made stark, simple and clear when viewed through the lens of aggregate “smart growth capacity.” Informed by an unbiased and empirical appraisal of their executives, CEOs can strategically target assignments, coaching and developmen – and if necessary, separatio – to improve growth performance. Asia today is a crucible, where the pace of change, pressures from globalization, and intensity of competition will generate new, and better, leaders. Organizations that find and develop them will discover that growth doesn’t emerge from markets, but from the collective capacity of their leaders.