Heidrick & Struggles: Preventing a Leadership Crisis in Asia's Talent Pipeline

Succession planning and the development of a pipeline of prospective leaders are vital parts of any company’s people strategy: turning to the talent pool to plug leadership gaps at the last moment is a high-risk move that could cause damaging uncertainty if critical positions are left unfilled, even temporarily. Worryingly, there are signs that the talent pipelines of some multinational companies in Asia are inadequate for the challenges ahead.

“Having a sufficiently deep bench is my biggest concern,” says Aidan O’Meara, president of the Asia Pacific region of VF Corporation, one of the world’s biggest consumer brands—a $12 billion conglomerate that owns household names such as Vans, Nautica, The North Face, Lee, and Wrangler.

Atul Khosla, vice president of human resources for the Asia Pacific region at Mondelēz, a global snack-food conglomerate, agrees, saying that while a critical talent shortage may not exist today, it is imminent. “If organizations do not invest in developing their teams now, there is a big risk of a leadership crisis within two years,” he says.

What factors are behind this pessimism? Why are multinational companies operating in Asia, in particular, at risk? And what can they do about it?

That there is an urgent need for scarce Asian talent is indisputable. In a recent survey by ManpowerGroup, for example, 48% of Asia Pacific employers reported that they faced difficulty in filling positions—particularly in management and executive roles—compared to 38% globally. This is partly due to demographics: some 19,000 people in the Asia Pacific region hit retirement age every day and are not being replaced by new entrants to the workforce, leading to acute talent shortages in countries such as Japan, South Korea, and even China.

Moreover, existing talent in the workforce is not being trained to succeed: according to CEB, “just 26% of Asia’s rising leaders believe their successors are ready to move to executive roles, compared to 43% in the rest of the world” who believe so. A study by Mercer, meanwhile, found that the majority of companies in Asia—59%—said their people managers have little or no accountability for developing leaders.

As Asia’s economies mature, seizing opportunities to grow in the region will require much more adept, and locally informed, leadership. Senior management teams and even boards can start by better understanding the landscape as well as the unique attributes required of leaders in the region.

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