Asia 2.0 :

Leading the Next Wave of Growth in Asia

Singapore

January 2011

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Asia 2.0 – a new way to grow

A new breed of leadership

Building a pipeline of Asia 2.0 leaders

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Asia 2.0 – a new way to grow

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Asia has recovered quickly from the crisis … but the new

world is different

While Asia’s growth before and after the financial crisis looks fairly secular …

2008 2009 2010 2011

China 9.6 8.7 10.0 9.9

India 7.3 5.7 8.8 8.4

Asia 5.2 3.5 6.9 7.0

US 0.4 -2.4 3.1 2.6

EU 0.6 -4.1 1.0 1.5

-5

0

5

10

15

Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4

India (2009) China (2009)

Domestic demand and domestic capital formation are now the key drivers of growth

Net Exports

Consumption

Capital Formation

Source: IMF, World Economic Outlook, April 2010

ADB, Momentum for Sustained Recovery, 2010, Korn/Ferry Analysis

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Asia’s growth model is shifting …

MARKET SHIFTSASIA 1.0

(1985 – 2005)

THE IMPETUS FOR

CHANGE

ASIA 2.0

(2006 – 2020)

CONSUMER SHIFT MADE IN ASIA

- Reduced Western

Consumer Spending

- Emerging Consumerism in

Asia

MADE FOR ASIA

INNOVATION

SHIFT

THE WORLD’S FACTORY

and BACK OFFICE

- Shifting R&D investments

- Asia’s drive to innovate

- Asia’s need to move up the

value chain

THE WORLD’S LABORATORY

and KNOWLEDGE OFFICE

JOBS SHIFTCHEAP and PRODUCTIVE

WORKFORCE

- Unemployment in the west

- Western companies

Asianizing

- Asian companies globalizing

CREATIVE and INNOVATIVE

TALENT

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THE CONSUMPTION SHIFT from MADE IN ASIA to MADE FOR ASIA

Asia’s middle class is growing at an incredible pace, leading to the creation of a global

consumer class at lower reaches of the income pyramid

28%

66%

23%

59%

30%

64%

21%

54%

2009 2030 2009 2030

Population Spending

Asia N. America + EU

% of the world’s middle class

(population and spending – PPP 2005)

Source : The New Global Middle Class: A Cross-Over

from West to East, Homi Kharas and Geoffrey Gertz,

Wolfensohn Center for Development at Brookings,

2010

THE DISCRETIONARY CONSUMPTION UPSIDE IN ASIAConsumer Spending (2007, USD billion)

Clothing &

FootwearElectronics

Alcohol &

Tobacco

House-hold

GoodsRecreation

US 429.8 162 205.6 456.9 881

India 28.2 3.8 14.2 21.1 11.8

China 95.8 11.8 31.4 57.1 34.2

(India + China) as a % of US

29% 10% 22% 17% 5%

Source: NY Times, Euromonitor, 2007, Korn/Ferry Analysis.

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# of Basic (Domestic) Annual Patent Filings

-

100,000

200,000

300,000

400,000

500,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Forecast

China

overtakes

Europe

China to

overtake US

Source : Thomson-Reuters, “Patented in China”, 2008

Japan

US

Europe

China

Korea

China to

overtake

Japan

THE INNOVATION SHIFT from THE WORLD’S FACTORY to the WORLD’S LABORATORY

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Tata Nano : the $3,000

car was conceived and

developed in India

Mac 400 : a hand-held

cardiogram ($800) developed

by GE in India

The USB Credit Card :developed by Shinhan Card in

Korea

F1 Night Race : World’s first night race in

Singapore

LG LX9500 : the world’s

first 3D LED TV

Kaohsiung Stadium :World’s first solar powered

stadium – in Taiwan

Eko Hybrid: World’s first

hybrid 2-wheeler ($500) – in

Bangalore

Harmony Express:World’s fastest train (394 kmph)

in China

THE INNOVATION SHIFT THE BRAVE NEW WORLD OF INNOVATION FROM ASIA

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THE JOBS SHIFT FROM A CHEAP LABOR FORCE to CREATIVE TALENT

High end, knowledge-

intensive jobs will move

to Asia, faster than

labor-intensive back

room jobs

The Economist, Special

Report on Emerging

Markets, April 2010

Business Week reported a

doubling of the proportion

US MBA students moving to

Asia … from 5% in

2008 to 10% in 2009.

With stubborn youth

unemployment levels in the

US and ongoing need to

talent in Asia, this trend is

likely to continue.

TALENT

CATEGORIES IN

DEMAND

IMPLICATIONS for ASIA

R&D AND

INNOVATION

China alone is home to more than 1200 foreign invested R&D

centers, creating more than 150,000 high end, knowledge

intensive jobs in the country over the next 3 years.

HIGH END

TECHNOLOGY AND

PROFESSIONAL

SERVICES

Major multinationals like IBM, Accenture, and Cisco are

working aggressively to place leaders in senior regional /

global roles into China.

Investment banks are trying hard to find talent for senior

roles in China, but the talent pool is incredibly shallow

GLOBAL LEADERSHIP

AND GOVERNANCE

As regional HQs continue to shift to Shanghai and Beijing,

there is an increasing need to place leaders in high profile

international roles in China. Local companies like Huawei and

Haier are aggressively looking for senior talent for global

leadership roles

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The JOBS ShiftWestern Multinationals are rapidly shifting global / international JOBS to Asia

ABB Group: Global robotics business HQ to Shanghai (2005)

Cisco Systems : 2nd ‘global headquarters’ in Bangalore (2006)

Honeywell : Electronics Materials Business HQ to Shanghai (2007)

Standard Chartered Bank : Global Private Banking HQ to Singapore (2008)

Rolls Royce : Global Marine Business HQ to Singapore (Mar ‘09)

Medtronic : Medtronic International HQ to Singapore (Dec ‘09)

Paypal : Paypal International (non-NA) HQ to Singapore (Feb ’10)

HSBC : Chief Executive moves to Hong Kong (Feb ‘10)

Thomson Reuters : Global Investment and Advisory to Asia (Mar ’10)

Wynn Resorts : actively considering moving global HQ to Macau (Apr ’10)

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A new breed of leadership

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Asia 2.0– a new leadership challenge

Asia 1.0 Challenge Asia 2.0 Challenge

StrategyReplicate / customize an existing

strategy to a new market context

Craft a strategy to generate new

growth in an un-served market

ExecutionScale up a proven execution platform

with limited localization

Develop a new execution platformthat can be scaled in new and diverse

markets

CustomerService established customer segments

and needs

Build insights on new customers and

un-met needs in the market

ProductPosition / re-position an existing

proposition in the addressable market

Use disruptive innovation to create

new categories of products / services

SkillsBuild / scale up a highly productive

workforce with good technical skills

Build and groom a diverse and

international pool of talent with

creative skills

Team and Culture

Build the discipline of performance and

results in a culturally homogeneous

team

Build a high performance team in a

global, multi-cultural environment

The intensity and prevalence of 2.0 challenges will call for a different set of leadership

capabilities for success.

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Asia 2.0 leaders will lead with multi-focus (non-

linear) thinking

Asia 1.0 Leadership :

success depends on single-

minded focus on plan,

execution and task

Asia 2.0 Leadership :

success will depend on

ability to handle

multiplicity, diversity, and

cultural differences

EXECUTOR CONTROLLER

ENERGIZER INTEGRATOR

Single Focus

Multi Focus

Responsive Deliberate

Clear

Directive

Task focused

Productive

Logical

Serious

Data - driven

Thorough

Open

Informal

Humorous

Adaptive

Inquisitive

Collaborative

Involving

Patient

Source : Korn/Ferry Research

Leadership challenges with an Asia 2.0 bias will require a new set of leadership

capabilities and styles.

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The Asia C-Suite is still 1.0 focused

Indian and Chinese senior leaders show a more task-focused, more hierarchical, more

socially distant style compared with successful global executives

PRIMARY STYLE SECONDARY STYLE LEAST USED STYLE

Global Best in Class (n =

1000 +) ENERGIZER INTEGRATOR EXECUTOR

Chinese C-Suite Executives

(n=100) EXECUTOR CONTROLLER ENERGIZER

Indian C-Suite Executives

(n=99) CONTROLLER EXECUTOR ENERGIZER

Source : Korn/Ferry Research

Successful global executives in the above sample are not just ‘western’, there are several

Asian and Latin American passports in that sample.

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The Asian Talent Market for 2.0 Readiness

n (Executives) = 1246

n (Managers) = 642

Clear Strength in Asia

2.0

Some strength / can

be developed

Less developed for

Asia 2.0

CHINA (Executives) 1% 16% 83%

CHINA (Managers) 1% 10% 89%

INDIA (Executives) 9% 21% 72%

INDIA (Managers) 8% 13% 79%

REST OF ASIA (Executives) 5% 19% 76%

REST OF ASIA (Managers) 4% 19% 77%

The odds of ‘finding’ 2.0 ready talent in both the top executive level and the next level

(managers) is low across Asia, with the only bright spot being India, with 9% readiness.

Source : Korn/Ferry Database of Finalist Candidates in Live Searches over last 12 months

% readiness (based on 2.0 leadership styles) in Asian FINALIST CANDIDATE pool

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The Leadership Skills that Comprise 2.0 ReadinessThe traditional strengths of Asia Leaders helped them succeed in 1.0, and the traditional

weakenesses will stand in the way of 2.0 success

Source : Korn/Ferry Database of Leadership 360 Assessments in Asia

Top 10 Strengths of Asian Leaders Top 10 Weaknesses of Asian Leaders

Critical for

Leadership Success

in Asia 1.0

• Action Oriented

• Perseverance

• Drive for Results

Critical for

Leadership Success

in Asia 2.0

• Approachability

• Boss Relationships

• Customer Focus

• Personal Learning

• Dealing with Paradox

• Managing Through Systems

• Motivating Others

• Developing Direct Reports / Others

• Strategic Agility

• Creativity

• Innovation Management

Equally important

for Asia 1.0 and 2.0

• Integrity/Trust

• Ethics and Values

• Functional /Technical Skills

• Intellectual Horsepower

• Conflict Management

• Managing Vision and Purpose

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Building a pipeline of Asia 2.0 leaders

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THE DEVELOPMENT CHALLENGEAccelerating the development speed by a factor of 5

In world class leaders, this development

journey takes 7-9 years.

In Asia, companies will need to accelerate

the development of leaders to cover this

journey in 1-2 years.

Executor Energizer Controller Integrator

Global Best in Class

Supervisor Profile

Global Best in Class

Director Profile

Matches Asia 1.0

Leader Profile

Matches Asia 2.0

Leader Profile

7-9 years

Source: Korn/Ferry’s research using Leadership and Thinking Styles assessment

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A new development paradigm is needed for Asia

2.0 organizations

25% of skills learnt through

HARDSHIP

70% from ASSIGNMENTS

20% from COACH / MENTOR

10% from TRAINING

How companies spend on development today

80% on TRAINING

10% on COACHING

10% on DEPLOYMENT

How executives learn

0% on HARDSHIP SUPPORT

Sources : Korn/Ferry Lominger Study

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TALENT MANAGEMENT for ASIA 2.0A new way of thinking and new thought-ware to execute

Asia 1.0 thinking Asia 2.0 thinking

HOW TO HIRE

•Fit with current job specifications

•Educational background

•Experience profile

•Fit with future leadership needs

•Diversity of experience

•Behavioral profile

WHAT TO ASSESS•Competence

•Performance

•Leadership Style

•Learning Agility / Future Potential

WHAT TO DEVELOP

•Managing Skills

•Rational Thinking

•Technical skills

•Leading Skills

•Self-awareness

•Emotional Competence

HOW TO DEVELOP

•Training

•On the job learning

•E-learning

•Apprenticeship

•Structured Challenges / Stretch Assignments

•Continuous Feedback and coaching

•Internal networking

CAREER GROWTH

•Functional / linear

•Uni-dimensional

•Local

•Cross-functional career

•Multi-dimensional

•International

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