Developing leaders is the weakest link for emerging Asia

Emerging Asia holds a lot of promise for the region, as it pulls in more investors to leverage its growth potential, but companies in the region are lagging their Western counterparts in leadership and talent management practices.

New research by The Boston Consulting Group (BCG) has found that companies in the region are falling into "a set of traps" that are holding them back on leadership development.

Vikram Bhalla, BCG's senior partner and report co-author, spoke to Human Resources on the findings.

The first trap, he says, is that each L&D provider, such as business schools and training companies, is focusing on just one part of the leadership development process - this could be personal effectiveness, or commercial skills, or team management.

"Leadership development requires that all of these topics be covered as a whole, in context of the business, while integrating the learning with real work experiences."

The next issue, he explained, was one of reinforcement.

"To change habits and behaviours while developing leaders, takes a lot of practice and reinforcement. If not done consistently, everyday, then all the effort invested upfront will go waste."

Based on practices of more than 1,200 companies globally, BCG's report identified 20 competencies in the field that, as they are developed, have a direct correlation on companies' profitability.

That meant that companies with strong leadership and talent management practices (called "talent magnets") increased their revenues 2.2 times, and their profits 1.5 times faster, than companies with weak practices (termed as "talent laggards").

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This outperformance was evident not just at the extremes with the strongest and weakest companies, but also at each of the six levels of maturity of these practices.

Average performers on the index, for example, increased their revenues 1.4 times faster, and their profits 1.2 times faster, than talent laggards.

Explained Bhalla, "The talent magnets are a very small set of 50-60 companies characterised by their high level of competence. Developing leaders and talent across the organisation is a big part of what their top leaders do for a living."

Added Mukund Rajagopalan, BCG's associate director and report co-author, about leaders in these top companies, "They spend as many as 25 days a year on these activities."

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