The Pitched Battle to Develop Leaders
The fates of companies facing a turbulent global economy in 2009 and beyond will be determined by the quality of their people. That is why the power to groom talent is now one of the top priorities of Taiwan's executives.
The Pitched Battle to Develop LeadersBy Benjamin Chiang, Yu-Jung Peng
From CommonWealth Magazine (vol. 415 )
With Taiwan's exports declining precipitously in recent months and the economy contracting, how can companies turn crisis into opportunity and amass the resources they need during difficult times, so they can emerge victorious when economic conditions improve?
In an interview in January with Fortune Magazine, management guru Jim Collins said that based on history, good companies will not be swept away by the current economic volatility and uncertainty, because they have navigated through turbulence before.
Based on his ongoing research, Collins said one major factor in helping firms get through tumultuous times is talent.
"If there's a storm on the mountain, more important than the plan are the people you have with you," said the author of the business classic Good to Great.
Collins stressed that the best companies have used difficult times, when quality people get laid off, to bolster their legions of talent.
"If you do not find a way to get those great people, you're not thinking long term enough," asserted Collins, who insisted that companies could not afford not to strengthen their talent level even if in times of great duress they tend to "zoom in" on the immediate problems facing them.
The Elusive Search for Top Talent
On the afternoon of January 16, more than 150 corporate human resources managers were gathered at the Taipei International Convention Center, totally captivated by a workshop on getting through the recession being given by U.S.-based human resource consultant DDI Asia/Pacific International Ltd. (Taiwan).
The gathering was but one indication that at a time when most sectors in the world economy are floundering, executive talent assessment and development consultants are thriving.
"Corporations want to find talent that will lay the golden eggs. Only those companies that already have their people ready will be able to step out on the battlefield when the economy takes a turn for the better," says DDI Taiwan consulting director Jenny Yao.
So popular have human resource services been recently that revenues from executive coaching and leadership development have doubled since the end of 2007, Yao estimates.
The management education industry is thriving in these economically turbulent times, because companies realize that recruiting talent is easy – it's cultivating talent that is hard. An old Chinese proverb says, "It is easy to find a thousand soldiers but difficult to find one good general." Finding, and developing, that general is no less important to a company than its sales or earnings.
Taiwanese Firms' Fatal Weakness
Many Taiwanese companies that have been in business for more than 50 years and evolved from small-sized enterprises to large-scale corporations are now facing a critical shortage of management talent.
"Companies want to expand globally, but who can help them get the job done? They find they don't have the manpower and are forced to begin cultivating a succession team," says DDI Taiwan general manager Mindy Yeh in describing the predicament most Taiwanese companies face.
Hu Changya, an associate professor in National Chengchi University's Department of Business Administration, observes that home-grown companies are a lot like many professional baseball teams, which focus on individual performance and results while ignoring the cultivation of young talent. They often prefer to spend money on signing established players away from other teams rather than investing it in player development.
"When companies get big, they cannot rely on technology and sales alone. They must build a highly capable leadership team," Hu says.
This results-oriented mentality stems from Taiwan's industrial structure. Most Taiwanese businesses are OEMs with thin margins that only focus on the immediate future. Few include talent cultivation in their long-term strategy.
"Taiwanese companies do not see talent development as an investment. They see it as an expense," observes Lee Ji-ren, a professor in National Taiwan University's Department of International Business. Company executives know talent is important, Lee says, but when it comes to allocating resources, they are unwilling to put money into human resource development.
"In the past, Taiwan's companies only provided training. In the future, they will have to strengthen personnel development," Lee stresses, asserting that cultivating the ability of executives and staff to teach others will become enterprises' next new source of competitiveness.
The mind-set of companies toward acquiring and developing talent is gradually evolving from "outside recruitment" to "in-house training." In a weak economy, the ability to groom talent has become the competitive axis around which firms are overhauling their core competencies.
A survey of 638 corporate executives conducted by DDI Taiwan found that the top priority for 71 percent of them was upgrading and deploying elite talent, far outpacing the number who cited raising productivity as their major concern.
Companies have three major weapons at their disposal to develop future leaders: mentoring, coaching and rotation.
"The ability to groom talent is not a luxury for top executives, but a fundamental skill that people at every level should have," stresses Swee-Huat Lee, a visiting professor in National Chengchi University's International MBA program.
Mentoring Spreads the Wisdom
The word mentor first appeared in Homer's Odyssey. Before Odysseus leaves Ithaca to conquer Troy, he entrusts his son to his wise and upstanding friend Mentor. Despite his father not being at his side, Odysseus' son, with the help of Mentor's tutelage, grows up to bravely face his responsibilities while his father is away.
Over the millennia since the epic poem first appeared, the word mentor has come to refer to wise and trustworthy members of an older generation. In today's workplace, mentoring involves sharing one's experience and expertise and caring for an apprentice's complete development.
Conscientious corporate mentors can dramatically shorten the learning curve for new employees and serve as models for teaching newcomers.
In recent years, Taiwanese firms have begun to adopt mentoring systems. According to a survey of 100 Taiwanese companies (with 66 valid responses) conducted by National Chengchi University's Hu, 62.1 percent of respondents were using mentoring systems, but only 43.9 percent linked mentoring to performance evaluations.
"For the mentoring system to be a success, individual achievements and coaching assessments must be linked, so that mentors will have the motivation to diligently share their experience," Hu says. Many executives, he adds, work hard on the front lines but forget that they still have the important role of acting as a behind-the-scenes mentors.
Jessie Hung, the vice general manager of Shui-Mu International Co.'s A.S.O shoe brand, says educating young talent is an intrinsic part of an executives' job. An executives' greatest achievement, Hung says, is when the overall strength of a company's work force is elevated as a whole.
The Right Successor Makes All the Difference
"Mentoring is teaching the thought process of top executives when they set strategies," says Evertrust Rehouse Group president Benson Liao. Liao believes the success or failure of an enterprise depends of the caliber of its future leaders, and their caliber depends on the company's ability to groom them for their leadership roles.
Facing intense competition in the real estate brokerage markets of Taiwan and China, Evertrust Rehouse in 2008 launched a "succession system" in which mentoring, and handing down the ins and outs of the real estate brokerage business to younger executives, was a major component.
Evertrust Rehouse selected 10 executives from a pool of 40 and assigned them to the chairman of the board and the president to learn at their sides and participate in inter-departmental meetings to learn all aspects of the company's operations.
"I'm responsible for three of them. I observe their work habits and performances and they have the chance to observe my decision-making process," Liao says. Liao also has weekly one-on-one conversations with his "apprentices," directly imparting the experiences he has gleaned during his 20 years in the real estate industry.
Aside from the mentoring system for top executives, Evertrust Rehouse "includes individuals' leadership abilities in the scope of consideration" when contemplating supervisor promotions at any level, says Yeh Fang-ru, Evertrust Rehouse human resources special projects director.
One advantage of the mentoring system is that it is a two-way learning process, with the mentor cultivating the apprentice but also furthering his or her own efficacy.
"You can learn a lot when acting as a mentor," says Sophia Tong, the former general manager of IBM Taiwan, speaking with the knowledge of someone who served as a mentor for many years.
Coaching: Seeing Your Own Blind Spot
In the sports world, most accomplished athletes have a coach who helped them launch their successful careers, somebody who was able to pinpoint the athlete's strengths and weaknesses, and help improve the weaknesses while optimizing the strengths.
When baseball legend Sadaharu Oh first joined Japan's Yomiuri Giants, he was not a skilled hitter. After every game, hitting coach Hiroshi Arakawa had Oh go to his home for one-on-one instruction. Arakawa discovered that Oh's swing reacted too slowly to the pitcher's release point, so he advised Oh to raise his front leg when the pitcher began his wind-up. That piece of advice led to Oh's famed "flamingo" kick and helped him hit 868 home runs in his career, the most of any professional baseball player in history.
Coaching systems are not only applicable to sports and the military. Top corporate executives also need a coach's ability to awaken understanding and unleash people's potential.
Swee-Huat Lee, who was corporate vice president for human resources at Taiwan Semiconductor Manufacturing Co. (TSMC) from 1998-2003, has found that the paternalistic leadership styles in Asian companies leave senior executives isolated at the top. "It's very lonely. Executives are embarrassed to lower themselves to ask subordinates questions," he says.
Atelligent Global Consulting Corp. chairman and CEO Ho-Ming Huang, who has a wealth of management experience, acknowledges, "Believing that you are an expert in the field is usually the biggest risk and the biggest blind spot."
The best way to educate senior executives is by giving them advice based on specific situations monitored by an outside observer. The observer offers suggestions on how the executive can adjust his thought process, helps him spot deficiencies and enables him to get a clear understanding of a future direction.
Lee spent many years as a top executive in Asia-Pacific branches of multinational companies. Always a perfectionist, he would even pick at style issues in Power Point presentations, complaining for instance that different-sized fonts were used in headlines.
"At the time, I was seen by my colleagues as somebody who was hard to get along with, but I didn't know it," Lee says.
A little more than 10 years ago, Lee attended a week-long executive coaching seminar at Macau's Westin Hotel. One night, the coach used an analogy to remind Lee what the difference was between perfectionism and pursuing excellence.
"It turns out that I was always going after the last 1 percent of the goal that had not been accomplished while ignoring the effort that went into the first 99 percent. I wasn't happy, and I made people around me unhappy," says Lee, who became a Greater China regional manager before he turned 40.
When Lee took the human resources job at TSMC, his first act was to introduce executive coaching and mentoring systems to 10-plus selected executives, grooming them for 18 months. Today, three of them have become corporate vice presidents.
Rotation Improves Feel for Operations
Rotating executives is another effective way to forge leadership skills, but the inability to apply the concept is one of Taiwanese companies' biggest weaknesses.
"Taiwanese enterprises do not handle rotation well. People here are not accustomed to having their responsibilities change," says National Taiwan University's Lee.
AU Optronics uses a rotation system as a teaching tool to cultivate its future leaders. Over the past 12 years, the company has engaged in four rounds of rotations of top managers, dramatically improving their feel for the company's overall operations. AUO vice chairman H. B. Chen says that the systematic rotation of positions erodes the sense of departmentalism some supervisors have, while strengthening their ability to consider a problem from many angles.
Far EasTone Communications also launched a rotation system three years ago, hoping to expedite the pace of talent development. When the program began, it was limited to individuals at the assistant manager level, but today it has expanded to as high as the company's vice presidents.
"When one vice president position was vacated, it affected the rotation of four vice presidents," says Patrick P.Y. Wu, the vice president of human resources at Far EasTone.
During the latest rotation, Far EasTone's vice president of marketing was transferred to its business unit, going from a support unit to the front lines with direct profit and loss responsibility.
"Having the experience of working in a support position naturally helped him see things in a different light," Wu says.
Before putting the rotation system in place, the refrain "you don't understand our department" was commonly heard at Far EasTone's inter-departmental managerial meetings. To augment the impact of the rotation system, Wu held a series of "power of change" coaching courses last year, inviting outside management educators to help the company's 200 supervisors, from assistant managers on up, acclimate mentally and professionally to the concept.
"Maintaining a strong base requires the turnover of executives," says Wu, who has 30 years of experience working in the human resources departments of multinational corporations. He stresses that firms cannot allow managers to be permanently attached to one position. Top executives must be able to deal with change if they are to retain their will to fight and their competitive edge.
Mentoring, coaching and rotation have become entrenched as the three major ways companies strengthen their ability to groom talent. For Taiwan's companies to grow from small-scale forest bandits into full-fledged marines who valiantly fight the good fight and value the passing-on of experience, they will need to effectively apply these three powerful teaching tools and unleash the latent potential of their people.
An individual's overall ability is like an iceberg. Professional skills are the part of the iceberg that rises above water, but "the part that has the biggest influence – the ability to lead – is the part of the iceberg under water," says Sophia Tong. Only through mentoring, coaching and rotation can a person's potential hidden under the water rise to the surface.
In these economically turbulent times, many company offices seem like killing fields, devoted to the pursuit of results. But if those companies hope to outlast the tumult and thrive when markets begin to recover, they must also serve as training camps, tirelessly beefing up their talent-grooming prowess.
Translated from the Chinese by Luke Sabatier