Talent Management in Emerging Markets: 1 Insight to Act on Today (Part 2)

This article is written by James Eyring

Increasingly, companies rely on Emerging Markets for revenue growth; this is particularly true given slow economic growth in the US, Europe and Japan. One of the greatest challenges to capturing growth in these markets is having the right leadership capability. Based on our on-going research on Talent Management in Emerging Markets and experience with companies, here is one insight into Emerging Markets that you can act on today.

When you have a large gap in talent, a natural tendency is to execute best practices in Talent Management (e.g., recruiting, selection, development) to bridge the gap to fill needed leadership roles. Unfortunately, many companies use a shotgun approach to do this and implement far more practices than may be necessary.

In a recent study on Talent Management in Emerging Markets, we asked multinationals operating across Asia about 45 talent management practices. All but three of these practices were in place and used consistently and frequently in countries we surveyed. However, many of these practices had low to moderate impact on outcomes such as meeting managerial pipeline needs, exporting talent to other countries and lowering turnover rates.

Moreover, some of the high impact practices were not used as frequently as some of the low impact items. When implementing talent management practices, focus on implementing high impact practices.

High Impact, High Frequency Practices. Thirteen practices were highly used, and of high impact (highly correlated with important outcomes). These included: Increasing authority to push development
• Increasing authority to push development
• Building/developing close relationships with leading universities
• Having a leadership team intact for at least two years

Increasing the authority to push development of leaders was one of the most impactful practices, which is consistent with other research.

Participants in the study reported that one of the earliest actions taken in a new market was to build close relationships with leading local universities. This helped in recruiting, internships and leadership development.

Surprisingly, a stable, local leadership team had a strong impact on outcomes. Having this may increase focus on talent management and the availability of senior leaders to develop others. Unfortunately, we have observed a trend in Asia of companies dismantling country management structures as they move more functions global. If not handled properly, this may reduce growth of leaders in Emerging Markets.

High Impact, Lower Frequency Practices. Eleven practices were of high impact but were not used as frequently, including:
• Hiring ahead of curve on seniority for key roles
• Hiring into a talent pool (not a specific position)
• Allowing a small span of management to encourage growth

Relatively lower use was a result of company policy in some cases (e.g., compensation practices preventing hiring ahead of the curve) and local practices in others (e.g., hiring into a talent pool, not a specific position).

Low Impact Practices. A number of items were of low impact. Some were used frequently, others not. These included:
• Hiring “returnees” to country
• Using expats to transfer skills
• Mentoring programmes

Low impact of hiring returnees and using expats is understandable. These practices are usually used when your talent management system is not working. Most surprising to study participants was the low impact of mentoring programmes. However, this finding is consistent with other research that shows that formal mentoring programmes have relatively weak outcomes. Informal mentoring has a stronger influence on career outcomes for mentees, formal mentoring has a much lower impact.

To build leadership, focus your efforts on high impact items, not all possible practices. Keep these tips in mind:
1) Best practices are not always strategic practices. Just because another company implements a practice does not mean it has great impact or is right for your business.
2) Make evidence-based decisions when implementing practices. Look for the best research and practice outcomes available to decide if a practice will result in strong outcomes for your business. Avoid picking the flavour of the day!
3) Execute a few high impact practices well before adding new practices. It is easy to start new initiatives, but more rewarding to implement a few well integrated initiatives that have impact.

(c) 2010 Organisation Solutions Pte Ltd.

About the Authors: Dr. James Eyring is the chief operating officer of Organisation Solutions, a global consultancy specialising in organisational design, development and change solutions worldwide. James has more than 20 years of experience in the field of Organisational Development and his areas of expertise lie in large-scale organisation design and change, leadership development, and the design and management of distributed organisations.