Building Emerging Market Leaders

March 29, 2011 12:40 am 0 comments

Over the last ten years, I have spent a lot of time helping great companies develop in emerging market locations. Consequently, a lot of my clients ask me, “Rick, how come leadership development is not working like it works in the US?”

If you plan to implement leadership development programs rooted in western style leadership principles, you will not be successful. Our own ability to lead is based upon a set of principles we have learned from the sum of our experiences growing up. The experiences that a western style leader has learned from is not the same as the experiences by many emerging market leaders.

There are at least 8 key differences that you must understand when creating a leadership development approach and program for emerging markets.

  1.  Collectivism over individualism
  2. Family vs Corporate mentality
  3. Younger Leaders
  4. Informal results vs formal results
  5. Educational experiences of recent generations
  6. City life vs Rural life
  7. Diversity in Classes of people
  8. Leader hierarchy

 COLLECTIVISM over INDIVIDUALISM: Collectivist cultures in which individuals are integrated into strong, cohesive groups; the group continues to protect the individuals, from their birth throughout their lifetime, in exchange for unquestionable loyalty

FAMILY vs. CORPORATE MENTAILITY: Most emerging companies are run by families, especially in Brazil, India, Mexico and Turkey6, and are typically paternalistic and autocratic. In other markets, such as China, where the state is the dominant organizational structure, firms are generally characterized by high bureaucracy, informal social networks and personal connections

YOUNGER LEADERS: Emerging Markets have the youngest populations in the world. 26 percent of the population in these countries7 is under the age of 14 and 35 percent is under 20. In contrast, it is expected that the total number of people in Europe between the ages of 50 and 64 will increase by 25 percent over the next two decades, while those in the 20 to 29 year bracket will decrease by 20 percent. The age of the population affects how individuals view organizational life and the issues they consider important.

INFORMAL LEARNING vs FORMAL LEARNING: The way individuals acquire knowledge also differs from one society to another. Historically, employees from the Emerging Markets tend to utilise informal learning means, such as family discussions and social interactions. Westerners, on the other hand, are conditioned to utilise formal learning sources such as books and seminars.

EDUCATIONAL EXPERIENCES of RECENT GENERATIONS: In the Emerging Markets, literacy rates have risen considerably since the 1970s and continue to increase as the local economies grow. During the same period, literacy rates in the United States and Europe have been stable. Just as local governments understand the importance of this change and continue to put great emphasis on education, business leaders should as well. They need to understand what this means in terms of upbringing, mindsets and support systems, and the way in which it influences employee performance. How does a change in literacy rates affect how one should lead the new workforce? Leaders need to look back one generation in the Emerging Market and understand literacy rate impact on society.

CITY LIFE vs RURAL LIFE: It is expected that by 2030, two thirds of the global population will live in cities. Population growth, coupled with rapid economic development, has led to a massive development of new cities in Emerging Markets. In contrast, urbanization is slowing down in the developed economies with people searching for more affordable housing, or simply desiring more tranquility. This translates into increasingly populating suburbs. The Emerging Markets are becoming the hub for innovation, wealth, finance, talent, technology, etc. For the emerging economies, and as leaders of the new workforce, it is important to consider the source for the growth of the cities.

DIVERSITY in CLASSES OF PEOPLE: Until recently, Europe, Japan and the United States were home to the majority of the global middle class. Today, however, as emerging economies grow, a new middle class is rising up from poverty. According to World Bank estimates, emerging countries accounted for 56 percent of the global middle class in 2000. This number is expected to increase to 93 percent by 2030. By discovering this insight into the new workforce, leaders are able to discern the amount of interactions the employees would have had with their brands and competitor brands as a user. Also, as employees are coming into the ranks of the middle class, organizational leaders should reflect on how the values, world views, risk tolerance, power relations, honor, etc. shape the employee, and understand what it means for talent attraction, recruitment, retention and development.

LEADERSHIP HIERARCHY: With Emerging Market employees’ understanding of workplace practices comes the historical dominance of family-business and the centrality of paternalistic cultures. Relating this to the new workforce, Emerging Market employees have a leader-centric mentality. The workforce is designed around the top position in the organisation, and from this comes a centralised approach to providing direction, making decisions and control. This is in contrast to Western multinationals who tend to be employee-centric—the organisation recognizes the preeminence of the employee and shares responsibility and accountability, delegates authority and includes the views of the employees.

Source of some content: Kenexa, “Leading the New Workforce – How to successfully lead.”

The competition for successful leaders in emerging markets will continue to grow. Strong leaders are needed, but using styles that embrace western business expectations with a blended approach of emerging market principles.

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