LEADERSHIP IN CHINA:

KEEPING PACE WITH A GROWING ECONOMY

> Paul R. Bernthal > Jason Bondra > Wei Wang

LEADERSHIP IN CHINA:
KEEPING PACE WITH A GROWING ECONOMY
> Paul R. Bernthal > Jason Bondra > Wei Wang

A Welcome from DDI

We are pleased to present this report, which offers a snapshot of the current status of leadership within Chinas business community. This report grew out of a larger study, DDIs Leadership Forecast, 20052006. Subtitled Best Practices for Tomorrows Global Leaders, the forecast reflects DDIs belief that all leaders eventually will work within a world economy, one in which lines between countries and cultures are blurred. The challenges leaders face now, and will increasingly face in the future, are captured in the urgent questions the forecastand this reportaddresses: Does the organization have the right leaders? Do those leaders have the necessary skills? Are they ready? Ronnie Tan Li Tong Vice President/Marketing Director, DDI Asia DDI believes that leaders and employees are the life force behind every successful organization. To remain competitive, organizations must be able to select, develop, and grow their leaders. No single approach to leadership development is right for every organization, but there are practices that work in most situations. We hope this report will provide insight into best practices and encourage further investments in leader development.

ABOUT DDI
Since 1970 Development Dimensions International has worked with some of the worlds most successful organizations to achieve superior business results by building engaged, high-performing workforces. We excel in two major areas: Designing and implementing selection systems that enable you to hire better people faster, and identifying and developing exceptional leadership talent crucial to creating a workforce that drives sustained success. What sets DDI apart is realization. We focus on the needs of our clients and have a passion for their success. The outcome? You bring the best people on board, who get up to speed faster, contribute more, and stay longergiving you the ultimate competitive advantage.

STUDY METHOD AND PARTICIPANTS

This study evaluated several aspects of leadership in China with a focus on these issues: 1. Leader skills. 2. The culture of leadership. 3. Leaders ability to identify and select talent. Human resource professionals and leaders from a range of organizations were surveyed in early 2005. HR professionals from 43 organizations (77 percent multinational) completed a paper-based survey; 394 leaders from those organizations completed a leader survey.

Development Dimensions International, Inc., MMV. Pittsburgh, Pennsylvania. All rights reserved under U.S., International, and Universal Copyright Conventions. Reproduction in whole or part without prior written permission from DDI is prohibited.

Leadership in China

CONTENTS
INTRODUCTION ..................................................................................................................................................4 Background............................................................................................................................................................4 Current Leadership Picture....................................................................................................................................4 Future Challenges ................................................................................................................................................5 LEADER SKILLS ..................................................................................................................................................5 Skill Levels of Leaders ..........................................................................................................................................7 THE FOUR THEMES OF CHINESE LEADERSHIP ............................................................................................8 Critical Leadership Skills........................................................................................................................................8 Getting Results ......................................................................................................................................................9 Relationship Management ..................................................................................................................................10 Coaching and Development ................................................................................................................................10 Managing Performance........................................................................................................................................11 THE CULTURE OF LEADERSHIP......................................................................................................................11 New Leader Preparation ......................................................................................................................................11 Development Opportunities for Leaders ..............................................................................................................12 Quality of Leadership Development Programs ....................................................................................................13 Defining and Promoting Leadership ....................................................................................................................13 EMPLOYEE HIRING ..........................................................................................................................................14 CONCLUSIONS ..................................................................................................................................................15 DEMOGRAPHICS ..............................................................................................................................................16 AUTHORS AND RESEARCH TEAM ..................................................................................................................17

FINDING 1
The most critical skills for Chinese leaders are motivating others, building trust, retaining talent, and leading highperformance teams.

INTRODUCTION
Background
If you take a survey of all the CEOs of listed companies in America and ask them, Whats the single factor thats going to change the world, its going to be China. Donald Straszheim, Economist, Straszheim Global Advisers LLC, Los Angeles1 The emergence of China as a major global economic force has put the world on notice. A culture steeped in tradition finds itself grappling with what shaped its past and what forces its future. Its rapid economic growthat a rate of 8 percent a year, compared to 3 percent in the United Stateshas come with a price. Chinas growth has dramatically stretched an already aging labor supply, fueling intense competition for talent. Turnover rates continue to rise as workers, their skills in demand, hold more bargaining power. While an economic juggernaut now and for the near future, China might not be able to sustain its newfound stature in the face of such challenges. While organizations around the world face the challenge of finding leaders, cultural factors are compounding that task in China. The continuing transformation of its economy means Chinese business leaders must possess a skill set that blend new ways with the old. Leadership in China has long been based on a foundation of mutual respect and a feeling of
Cited in China May Be on Course to Overtake U.S. Economy, by C. Hutzler, January 24, 2005, Wall Street Journal, p. A2.
1

connectedness among individuals. However, to compete globally, Chinas new leaders need leadership qualities that reach across nations and cultures. Those organizations that are able to find, develop, and retain leaders who can perform at high levels while constantly adapting to a changing society not only ensure their continued success but also will realize a competitive advantage.

Current Leadership Picture

Todays leaders in China face a unique challenge: On the one hand, they know they need to adapt to the demands of a global market if they want their organizations to compete and succeed. On the other hand, they must respect cultural traditions. These traditions include the concept of guan xi, which teaches the relatedness or connections among individuals. Furthermore, Chinese culture has been heavily influenced by the teachings of the great philosopher, Confucius, who stressed the value of the thoughtful man, learning through mistakes while consciously respecting tradition and values. To better understand this challenge, it helps to look at what sets China apart culturally from the rest of the world regarding leadership. Considerable insight into the Chinese leadership ethic can be found in a comprehensive study of cultural influences in the workplace conducted by Geert Hofstede. Hofstedes study analyzed data from more than 70 countries spanning six years.2 The results showed that China had ranked the highest in long-term orientation, a finding consistent with the high value the Chinese place on patience and perseverance

Cultures Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations, by G. Hofstede, Thousand Oaks, CA: SAGE Publications.
2

Leadership in China

and the relatively low value they place on aggressively acting for the sake of taking action. The study also found that feelings of individualism was ranked lower in China than in other countries. The data from the study underscored the traditionally accepted perceptions of leadership in China; yet, Chinas important role in a global economy means that the countrys traditional ideals of leadership will be forced to adapt if its to compete successfully in an increasingly international marketplace. Skills that were once viewed as primarily Western in importance (and, therefore, not necessarily relevant within Chinese culture) are now found to be critical to the success of leaders in China too. For instance, leaders now are expected to be coaches who can guide the development of their teams. Carol Hymowitz, writing in the Wall Street Journal, notes, Young, educated Chinese from top schools with few years of work experience often have their pick of entry and midlevel jobs . . . They are looking for training and frequent promotions, and theyre willing to job hop to advance.3

LEADER SKILLS
Leadership styles and skill levels in China are very much a reflection of Chinese culture itself; thus, culture might have implications for how Chinese leaders will fare in a fast-growing business environment. Although Chinese organizations have operated quite effectively in the past, will those business methods and skills continue to be effective in an international economy? FINDING 1: The most critical skills for Chinese leaders are motivating others, building trust, retaining talent, and leading high-performance teams. We asked HR professionals and leaders to select the top 10 most critical skills for leaders from a set of 22 possible skills. Results show that Chinese leaders emphasize several factors that are important for sustained performance (see Figure 1): Motivating Others: Motivation is closely correlated to employee productivity and retention. In large part its up to leaders to spark a high level of sustained energy and peak performance in people. In the China of tomorrow, it will be critical for the countrys leaders to leverage employee talent and ensure that every employee fully contributes to meeting organizational goals. Building Trust: While trust is the responsibility of each individual, leaders are the guardians of the trust environment. In a workplace where trust is valued, organizations see more teamwork, partnering, and productivity. Without trust, Chinese leaders would have a hard time marshalling their resources and responding to new challenges.

Future Challenges
An army of a thousand is easy to find, but, ah, how difficult to find a general. Chinese proverb As if managing fast-breaking change was not enough for Chinas leaders, they also are expected to recruit, retain, and develop talent while respecting the cultural influences that played a vital role in their identity as a nation. Are these leaders ready for the challenges before them? Is there a clear image of successful leadership in China? The following endeavors to begin a discussion on the current state of leadership in China and what organizations must do to support the leaders upon whom they depend.
3 Cited in Recruiting Top Talent in China Takes a Boss Who Likes to Coach, by C. Hymowitz, April 26, 2005, Wall Street Journal.

FINDING 2
Almost one-quarter of Chinese leaders are weak in the skills most critical for success in their roles.

Retaining Talent: Chinese leaders need to work to retain the talent that drives team and organizational success. In Chinas competitive labor market, organizations find themselves competing for the best talent while their employees consider going to those organizations that offer the best opportunities. Chinese leaders recognize that talent is the key to long-term success and that they must work hard to find and keep the right people. (In the new economy,

dissatisfaction with benefits and compensation arent always the primary reason employees leave their organization; many employees leave because of poor relationships with their leaders.) Leading High-Performance Teams: Though team members attitude and abilities play a critical role in achieving optimal performance, it is the leader who can be the make or break factor in a teams success. The leaders

Motivating Others Building an Environment of Trust Retaining Talent Leading High-Performance Teams Building Winning Partnerships Delegating for Results Leading Change Achieving Your Leadership Potential Valuing Differences Setting Performance Expectations Resolving Conflict

72%

80% 80% 77%

Resolving Conflict Rapid Decision Making Developing Others Adaptive Leadership Managing Performance Problems Coaching for Improvement Coaching for Success Influential Leadership Reaching Agreement Reviewing Performance Progress Making Meetings Work

40% 19% 38% 35% 38% 49% 35% 37% 34% 35% 31% 30% 25% 21% 14% 16% 15% 12% 10% 28% 24% 47% 58%

75% 72% 68% 70% 51% 44% 49% 57%

55% 53%

49% 51% 43% 19% 41% 56% 40% 19%

26%

10

20

30 40 50 60 Percent Rating As Critical

Leaders HR

70

80

90

Interviewing Skills

10

20

30 40 50 60 Percent Rating As Critical

Leaders HR

70

80

90

FIGURE 1: Critical Skills for Leaders in China

Leadership in China

knowledge, skills, and abilities can transform an acceptable team into an exceptional one. In China where relationships are of paramount importance, leaders know they must build relationships among team members and between teams. It is interesting to note that both leader and HR professional ratings yielded the same set of top skills for leaders. Such agreement is a positive sign because it shows that HR professionals understand what it means to be a successful leader in China. Although the relative importance of this set of leadership skills may be unique to China, leaders around the world acknowledge the importance of these same skills. The real difference is in the level of emphasis each culture places on these skills and the current level of leader proficiency.

70 60 50 40 30 20 10 0
Weak Acceptable Strong

57%

23%

20%

FIGURE 2: Strength of Chinese Leadership: Leader Ratings Figure 3 illustrates leaders proficiency in 22 skills as rated by both leaders and HR professionals. The skills are ranked from most important to least important. Leader and HR professional ratings differed, sometimes considerably, as in Delegating for Results (32 percent vs. 7 percent) and Valuing Differences (24 percent vs. 5 percent). Despite their differences, both groups agreed that less than a third of all leaders demonstrated strength in any skill. For example, leaders indicated that only 11 percent of leaders are strong in skills related to retaining talent, the third most critical skill area.

Skill Levels of Leaders

FINDING 2: Almost one-quarter of Chinese leaders are weak in the skills most critical for success in their roles. In addition to identifying the most critical skills, we asked leaders and HR professionals to rate leaders proficiency levels. We found that relatively few leaders demonstrated strengths in the most important skill areas. Figure 2 shows the percentage of leaders rated as weak, acceptable, or strong in the top 10 most important skill areas for leaders. Although a slim majority of leaders show an acceptable level of skill (57 percent), almost one-quarter were deemed weak in the most important skills needed for success.

FINDING 3
Chinese leadership skills can be classified into four themes: getting results, relationship management, coaching and development, and managing performance.

In general, the 10 most critical skills received somewhat higher strength ratings than the less critical skills (see Figure 3). On average, 20 percent of leaders demonstrate strengths in the top 10 skill areas. These findings suggest that Chinese leaders will need to devote more attention to developing the skill areas that are most important for their success.

THE FOUR THEMES OF CHINESE LEADERSHIP

Critical Leadership Skills
FINDING 3: Chinese leadership skills can be classified into four themes: getting results, relationship management, coaching and development, and managing performance.

Resolving Conflict
Motivating Others Building an Environment of Trust Retaining Talent Leading High-Performance Teams Building Winning Partnerships Delegating for Results Leading Change Achieving Your Leadership Potential Valuing Differences Setting Performance Expectations

14% 5% 22% 19% 12% 7% 2% 8% 11%

14% 14% 7% 11%

26%
Rapid Decision Making

25%
Developing Others Adaptive Leadership

12%

16% 29% 32% 14%

Managing Performance Problems Coaching for Improvement Coaching for Success Influential Leadership Reaching Agreement

Top 10 Most Critical Skills

12% 16% 20% 20% 21%

23% 7% 5% 7% 5% 16% 12% 10% 24%

9% 9% 9% 12% 7% 9%

Reviewing Performance Progress Making Meetings Work

16% 9% 9%

18%

10 20 30 Percent Rating the Skill as Strong

Leaders HR

40

Interviewing Skills

10 20 30 Percent Rating the Skill as Strong

Leaders HR

40

FIGURE 3: Strength of Leader Skills

Leadership in China

After carefully reviewing the skills deemed critical and the areas of strength, we attempted to identify underlying themes that define the nature of leadership in China. We submitted the proficiency ratings made by leaders to a principle components factor analysis. This analytic method allowed us to determine which skills tended to cluster together. Four primary themes emerged: 1. Getting Results 2. Relationship Management 3. Coaching and Development 4. Managing Performance The skills within each theme are closely related. Table 1 illustrates these themes in several ways. The skills are grouped within their appropriate theme. They also are listed in order of their critical ranking as determined by leaders (in parentheses next to each skill). Additionally, the table provides ratings of leader proficiency for each skill. By taking a closer look at each theme, we can better describe the requirements for effective leadership in China.

TABLE 1: THE FOUR THEMES OF LEADERSHIP (LEADERS RANKINGS AND RATINGS)

Leader Proficiency Ratings > > > Development Need Theme 1: Getting Results Retaining Talent (3) Leading High-Performance Teams (4) 27% 30% 17%

Acceptable 58% 59% 67% 58% 50% 57% 57% 58% 53% 60% 57% 44% 57% 70% 65% 58% 52% 59% 63% 60% 58% 60% 59% 60% 59% 63%

Strength 15% 11% 16% 10% 22% 11% 20% 22% 26% 25% 29% 14% 24% 14% 21% 18% 32% 12% 16% 20% 9% 12% 16% 8% 7% 18%

Achieving Your Leadership Potential (8) 32% Rapid Decision Making (12) Adaptive Leadership (14) Influential Leadership (18) Theme 2: Relationship Management Motivating Others (1) Building an Environment of Trust (2) Building Winning Partnerships (5) Leading Change (7) Valuing Differences (9) Resolving Conflict (11) Reaching Agreement (19) 28% 33% 23% 20% 21% 15% 13% 42% 19% 16% 14%

Getting Results
The traditional leadership model in China emphasizes the importance of relationship management. However, there is an underlying skill set that is even more fundamental: getting results. DDIs Leadership Forecast 20052006 found that most leaders believe that getting results is the action that garners the most respect in their organizations. In this theme, we see
4

Theme 3: Coaching and Development 24% Delegating for Results (6) Developing Others (13) Coaching for Improvement (16) Coaching for Success (17) Interviewing Skills (22) Theme 4: Managing Performance Setting Performance Expectations (10) Managing Performance Problems (15) Reviewing Performance Progress (20) Making Meetings Work (21) 16% 29% 22% 20% 33% 28% 25% 32% 35% 19%

personal leader skills such as adaptive leadership, influential leadership, achieving leadership potential, and rapid decision making. All these skills are related to maximizing a leaders personal impact as a leader, not to his or her management of direct reports.
Leadership Forecast 20052006: Best Practices for Tomorrows Global Leaders (p. 8), by P.R. Bernthal and R.S. Wellins, 2005, Pittsburgh, PA: Development Dimensions International.
4

Note: Numbers in parentheses indicate leaders critical rankings.

FINDING 4
More than one-half of Chinese leaders are inadequately prepared for their roles in the new economy.

This theme also includes the practical skills of retaining talent and leading high-performance teams. Both of these skills are closely tied to the concept of getting resultsleaders who can retain talent are more likely to get results because they spend less time hiring new employees and operating with vacant positions. In addition, by guiding their teams to a level of high performance, leaders can focus team efforts and help increase team productivity.

Winning partnerships are those in which all partners value the effort and the results. In successful partnerships, all contributors are uniquely valued for their contributions in a trusting work environment. Leaders in China strive to maintain harmony by resolving conflicts and helping others reach agreement. In a global and diverse workplace, Chinese leaders will need to manage cultures and different styles to unify others efforts toward a common goal. Leaders also must be able to help their teams navigate through change. In the new China, a leaders ability to shift gears and embrace change is key to ensuring they and their teams cross the finish line ahead of competitors. If a team is unprepared or lacks a clear vision for where they are going, the result can damage the relationships the leader has worked so hard to maintain.

Relationship Management
In China the value placed on leaders ability to manage relationships with employees often is prized more than any other skill. Our findings underscore this culturally unique fact. Relationship management is an important skill set for leaders in any culture, but the Chinese concept of guan xi reinforces its value. As Lien Siaou-Sze, senior vice president of HewlettPackards Technology Solutions Group in Asia-Pacific and Japan, stated, Before people will follow willingly and enthusiastically, they must truly believe in the leader. This is based on the leaders core values and the credibility that has been accumulated over time. Lien Siaou-Szes observation highlights the prominent role trust plays in successful leader-team relationships, where trust is the key to motivation. But theres more to these productive, mutually respectful relationships than reciprocal trust between the leader and team members; other important skills are involved too.

Coaching and Development

With the increasing competition for talent, a leaders ability to coach and develop team members will be critical for successful leadership and for attracting high-quality talent. In her article in the Wall Street Journal, Hymowitz reported that the managing director of an international search firms Beijing office found that money is a less important reason to change jobs than the potential to grow and have a close working relationship with an immediate boss.5 Evidence of this can be seen in the actions of college graduates seeking entry-level and mid-level
Quoting Grace Cheng of Korn-Ferry International in Recruiting Top Talent in China Takes a Boss Who Likes to Coach, by C. Hymowitz, April 26, 2005, Wall Street Journal.

10

Leadership in China

employment: They often look for strong leaders who can help them further their careers; in particular, they want leaders who can provide development opportunities and offer mentoring/coaching relationships. In addition to guiding the development of new hires, Chinese leaders must be able to coach existing team members to promote productivity. Too many leaders hang on to the misguided concept that a good coach is someone who helps his or her team learn from its mistakes. This type of leader/coach focuses on improvement and correct performance only after mistakes happen. In Chinas current environment, organizations cannot afford this trial-and-error approach to productivity growth. To grow and succeed, organizations are learning that they need things to be done right the first time.

THE CULTURE OF LEADERSHIP

In addition to their own personal drive and determination, leaders need their organizations support and encouragement to develop their skills. The increased scrutiny on Chinese leaders will challenge their understanding of what it means to be a leader and their level of preparedness for managing their teams in a growing economy. We asked leaders about their current organizational culture and the level of support they receive. Their responses are reflected in the following findings.

New Leader Preparation

FINDING 4: More than one-half of Chinese leaders are inadequately prepared for their roles in the new economy. As seen in Figure 4, about 55 percent of HR professionals feel that new leaders are not adequately prepared for their roles. Leaders believe that 36 percent of their peers are not ready. This low level of readiness is especially troubling given that more than three-quarters of leaders are not strong in the skills most critical to their success. Too often, new leaders are thrown into their roles with little or no preparation. New leaders might be selected because they are good at technical aspects of their job, but not necessarily at leading people. Unfortunately, many organizations evaluate and select leaders based on current performance in non-leadership positions instead of readiness for a leadership role. If new leaders are to be successful, they need to receive support and development opportunities before assuming a leadership position.

Managing Performance
Managing performance addresses the ability of a leader to consistently keep the team performing at high levels. Although Chinese leaders did not consider this a critical skill set, managing performance is indeed an important part of leader success. In a competitive environment, there is no room for misdirected effort and poor performance. Achieving business results requires aligning an employees goals with the organizations overall strategy. Leaders must help people see how their efforts contribute to the organizations success. When leaders are able to review progress toward agreed upon-expectations, they strengthen the performance of the individual, the work group, and the organization. Poorly performing employees can work directly against leaders efforts at maintaining relationships on their teams. Just one employee with chronic performance or work-habit problems can drag down the performance and morale of an entire work group. Handling those kinds of issues can dominate leaders time and lead to frustration and stress.

11

FINDING 5
Most leaders and HR professionals agree that leaders have opportunities to develop.

Its difficult to know exactly what will happen to the Chinese economy, which has a potential for enormous growth. Although many leaders are unsure about their own readiness to handle future challenges, the issue is receiving more and more attention. In fact, most HR professionals (78 percent) agree that senior leaders give the issue of leader strength a lot of attention. Senior leadership involvement is a key influence on the success of leadership development and succession management programs. Those organizations that devote attention to leadership preparation will likely reap the greatest benefits.
Strongly Disagree 0%

Development Opportunities for Leaders

FINDING 5: Most leaders and HR professionals agree that leaders have opportunities to develop. We asked leaders and HR professionals if there were opportunities for leaders to develop. About 78 percent of HR professionals and 83 percent of leaders felt that development opportunities were available. However, this finding does not reflect the quality of those development opportunities. (See the following section for more on this topic.) The best organizations view leaders as assets who need to be

FINDING 6
More than half of HR professionals feel that current leadership development programs are of poor or fair quality.

Strongly Agree 5%

nurtured and cultivated if they are to continue to maximize longterm performance. If leaders are not given the opportunity to develop, then their teams and, ultimately, the organization, will suffer from a failure to adapt and grow. For leaders to be
Disagree 55%

FINDING 7
About 38 percent of leaders disagree about what it means to be a good leader.

Agree 40%

strong in any area of their jobs, they must have development opportunities that allow them to nurture and refine their skills. To realize the potential of development, leaders need to identify their strengths and development needs, create a development plan, participate in development activities, and apply their new skills. Studies have shown that special projects and assignments and

FIGURE 4: Leaders Preparation for Their Roles in the New Economy

Note: Numbers indicate HR professionals ratings.

mentoring/coaching relationships are highly effective methods for developing leader skills.6 Chinas growing economy will offer many opportunities in the form of special projects and assignments for leaders to take on so they can grow their skills. Regarding mentoring and coaching, most leaders (82 percent)

Bernthal and Wellins, p. 15.

12

Leadership in China

believe good leadership role models already exist in their organizations. By leveraging the experiences of these effective leaders, organizations can create mentoring/coaching relationships to build the skills of emerging leaders.

These ratings may show that Chinese organizations, like those in other countries, too often fail to create competency models that can be used to select leadership development programsprograms that should be linked to the competencies important for leader success. Without a good understanding of what it means to be an effective leader, development programs may miss important skills or focus on the wrong behaviors. In addition, leaders need varied and high-quality programs that are targeted specifically to their needs. Each leader has a different learning style; some may prefer to learn skills in the classroom, on the job, or through alternative media. Finally, good leadership development systems can improve the learning experience by including components such as electronic performance support systems, adequate personal assessment, and the availability of stretch assignments. Organizations in China will need to carefully examine their approach to leader development and focus on

Quality of Leadership Development Programs

FINDING 6: More than half of HR professionals feel that current leadership development programs are of poor or fair quality. We asked HR professionals in China to evaluate the quality of their current leadership development programs. More than half (57 percent) considered their programs to be of poor or fair quality (see Figure 5). Leaders ratings were less harsh: 47 percent rated development program quality as poor or fair.
Excellent 5% Good 38% Fair 49% Poor 8%

improving the overall quality of the learning experience.

Defining and Promoting Leadership

FINDING 7: About 38 percent of leaders disagree about what it means to be a good leader. We asked leaders and HR professionals if their organizations understand what it means to be a leader. About 38 percent of leaders and 26 percent of HR professionals stated that leaders in their organization disagree about what it means to be a good leader. This level of disagreement is troubling because it shows that many people are unclear about what leaders should be doing. Nevertheless, we must recognize that in a rapidly changing work environment, its hard to know what skills leaders will need.

FIGURE 5: Overall Quality of Leadership Development Programs

Note: Numbers indicate HR professionals ratings.

13

FINDING 8
About three out of ten new hires are not good hiring decisions.

A common understanding of what it takes to be an effective leader is rooted in the existence of good competency models for leadership that underpin HR systems. Selecting and promoting good leaders should not be a hit-or-miss proposition. Organizations must develop a consistent, accurate model of leadership that is used by leaders throughout the organization. Such a model helps leaders know what is required for success and understand the criteria that will be used to evaluate their performance. It also will enable them to use consistent criteria to evaluate the performance of others and understand what areas those individuals need to focus on improving.

high-quality hires, many new hires perform poorly and are unlikely to stay with the organization.

Skills, Knowledge, Abilities

33% 32% 33% 43% 36%

0 10 20 30 40 50 60

67% 68% 67% 57% 64%

70 80 90 100

FINDING 9
Nearly half of Chinese leaders have poor or fair interviewing skills.

Motivation to Perform Match with Culture Job Performance Likelihood of Staying

EMPLOYEE HIRING
A key leadership role in any culture is that of acquiring the right talent to fuel the organizations success. Leaders ability to identify and select the right people ultimately will play a role in leader performance. We asked Chinese leaders to consider the people that the organization had hired in the past year and to evaluate the new hires in a common set of characteristics. FINDING 8: About three out of ten new hires are not good hiring decisions. When asked to rate the overall effectiveness of their new hires, leaders claimed that 29 percent (almost one third) of their new hires were not good hiring decisions. HR professionals were slightly less critical, saying that only about 22 percent were poor hires. Figure 6 shows leaders ratings of new hires in several competencies. Although leaders are finding a good number of

Good/Excellent

Poor/Fair

FIGURE 6: Leaders Ratings of New Hires

FINDING 9: Nearly half of Chinese leaders have poor or fair interviewing skills. The quality of new hires relies in part on a leaders ability to conduct a good interview. The selection process may include other decision points, but the hiring manager is often the last and most important step. Leaders and HR professionals closely agree on the percentage of Chinese leaders with good or excellent interviewing skills (57 percent for leaders; 58 percent for HR professionals). This relatively low proportion of skilled interviewers supports the corresponding finding of a lack of high-quality new hires.

14

Leadership in China

Interviews are the primary source of candidate information, so selection systems are only as good as the interviewers and the techniques they use. One of the most effective methods for conducting interviews involves the collection of complete behavioral data on candidates past experiences. Effective interviewers gather complete and relevant examples of the skills, knowledge, and motivations that candidates have demonstrated. If leaders can conduct effective interviews and select the right people, their team members are more likely to perform effectively.

outline their business strategy and goals, and then identify leader competencies that are in line with implementing their strategy. Chinese organizations need to strengthen their leader development programsNearly half of the HR professionals in our sample believe that their leaders are not ready for their roles in the new economy. Everyone seems to be watching anxiously, waiting to see if leaders can rise to the challenge. Current leadership development programs appear to offer opportunities but they lack quality. Merely having a development program in place is not enough. Leaders need to learn real skills through proven methods that they can immediately apply to achieve business results. Some organizations are concerned that leaders who have been developed might leave for other positions. The problem is that if organizations dont offer development, their leaders will take their skills and seek development elsewhere. Leaders in China can sense the enormous opportunities arising in their country and for that reason will be increasingly likely to take the jobs that offer the most promise. Chinese organizations need to create accountability for leader development. Senior leaders seem to care about leader development, but what are they actually doing about it? Leaders need help in selecting new employeesEffective leadership is only part of the equation for success in Chinese organizations. Leaders need to find and hire the right employees to help implement their plans and strategies. We found that nearly half of Chinese leaders need to improve their interviewing skills. Organizations should remember that hiring good talent is far more than an HR responsibility. HR may set the stage for hiring processes and outcomes, but leaders often make the final decision when it comes time to select new hires. Proven methods such as behavioral interviewing can develop a valid and consistent approach to hiring and boost leaders confidence and effectiveness.

CONCLUSIONS
Chinese leadership skills will change in the face of an expanding economyThe model of Chinese leadership, in place for many years, has proven effective for achieving business results. However, with its culture and business model changing daily, Chinese leaders will need to change the way they do business too. Even leaders working within national companies will feel the influences of global competition. The Chinese model of leadership focuses on building interpersonal bonds, collaboration, teamwork, dignity, and trust. These same qualities are important for Western leaders, but Western leaders differentiate themselves from their Chinese counterparts because they are more inclined to be entrepreneurial and to take risks. Furthermore, one of the biggest challenges for Chinese leaders will be to better manage their employees toward high performance, a current area of weakness. Chinese organizations lack consistent models of leader effectiveness HR professionals and leaders concur that they are not entirely sure which skills are most important for leaders of the future. Because the future is uncharted, it is difficult to determine the appropriate direction for development, selection practices, or promotion decisions. Chinese organizations need to

15

DEMOGRAPHICS
ORGANIZATIONAL
Publicly Traded 48.8% 41.9% 9.3% Yes No Unreported Number of Employees in the Entire Organization 0.0% 7.0% 7.0% 9.3% Presence in the Global Market 16.3% National companyWe do not own, operate, or have affiliate offices outside our country. Multinational companyWe own, operate, or have affiliate offices outside our country. Unreported 23.3% 14.0% 20.9% 4.7% 2.3% 2.3% 2.3% 7.0% 110 1150 51100 101200 201500 5011,000 1,0015,000 5,00110,000 10,00120,000 20,00150,000 50,001 or more Unreported 3.8% 19.3% 48.7%

LEADER
Leadership/Management Level 28.2% First-level leaderSupervisor, team leader, foreman, etc. Mid-level leaderLeader of first-level leaders (group managers, district managers, etc.) Higher-level leaderLeader/Manager of mid-level leaders (director, department head, vice president, etc.) Senior-level leaderExecutives and those in policy-making positions (CEO, COO, CFO, executive VP, senior VP, plant manager, etc.)

76.7%

7.0%

16

Leadership in China

AUTHORS AND RESEARCH TEAM

PAUL BERNTHAL, Ph.D. is manager of DDIs Center for Applied Behavioral Research and director of DDIs HR Benchmark Group. Paul has conducted audits and evaluations of selection systems in such organizations as Steelcase, Tenet Healthcare Corporation, Bic Corporation, Oracle, and 7-Eleven. A recognized expert in measurement and evaluation of HR systems, Paul has had his work published in Training & Development Journal, Group and Organizational Management, USA Today, and U.S. News & World Report. JASON BONDRA, MBA Candidate, Katz Graduate School of Business at The University of Pittsburgh, is a researcher with DDIs Center for Applied Behavioral Research and DDIs HR Benchmark Group. Jason has managed several international benchmarking studies including Managing Performance: Building Accountability for Organizational Success; Leadership Forecast: A Benchmarking Study; and Selection Forecast: Recruiting and Hiring Talent. WEI WANG, Ph.D. Candidate of Workforce Education & Development at The Pennsylvania State University, served as a special consultant for this study. In addition to numerous publications, she has worked as an HRD and HRM consultant in China. RONNIE TAN LI TONG, Vice President/Managing Director, Asia. Mr. Tan Li Tong uses his 20-plus years of experience to work with clients in diverse industries, providing consulting in leadership development, executive assessment, performance-driven management systems, teams, and companywide change intervention strategies. He is frequently invited to speak at various international events and is regularly quoted by the Asian media on current trends and issues. PATTERSON S. (PETE) WEAVER, Senior Vice President and Chief Learning Officer. Pete has more than 25 years experience in the research, design, and delivery of training, selection, assessment, and development systems. He is a key DDI thought leader in management and leadership development, including the use of high-technology and internet platforms. He speaks frequently at conferences on topics related to leadership development and the integration of emerging technologies with learning and assessment systems.

17

THE AMERICAS
WORLD HEADQUARTERS PITTSBURGH 412.257.0600 MEXICO CITY 52.55.1253.9000 TORONTO 416.601.5500 Other major offices in Atlanta, Chicago, Dallas, Detroit, Los Angeles, Monterrey, Montreal, New York, St. Louis, San Francisco, Santiago, and So Paulo

EUROPE/AFRICA
DSSELDORF 49.2159.91680 LONDON 44.1.753.616.000 PARIS 33.1.41.9686.86 Other major offices in Johannesburg, Utrecht, and Warsaw

ASIA-PACIFIC
HONG KONG 852.2526.1188 SINGAPORE 65.6226.5335 TO LEARN MORE CONTACT: SYDNEY 61.2.9466.0300 Other major offices in Auckland, Bangkok, Jakarta, Kuala Lumpur, Manila, Melbourne, Seoul, Shanghai, Taipei, and Tokyo E-MAIL: INFO@DDIWORLD.COM WEB: WWW.DDIWORLD.COM
Development Dimensions International, Inc., MMV. All rights reserved.

MKTLDWP08