An army of a thousand is easy to find, but, ah, how difficult to find a general.

—Chinese proverb

“The emergence of China as a major global economic force is likely to put pressures on the supply of talent both within China and more broadly”, says DDI General Manager, Mark Busine.  “Its rapid economic growth—at a rate greater than 8 percent a year, (compared to 3.4 percent in Australia), will dramatically stretch an already aging labor supply, fueling intense demand and competition for talent. “ 

“While clearly an economic juggernaut, the future success of China’s economic prosperity will rely heavily on its ability to source quality talent, especially leadership talent” says Busine. “While organisations around the world face the challenge of finding leaders, cultural factors are compounding the 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 connectedness among individuals. However, to compete globally, China recognises the need for organisations to develop or import leadership qualities that reach across nations and cultures. Those organisations 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 realise a competitive advantage.

The challenge facing China is evident in DDI’s recent research - Leadership in China: Keeping Pace With a Growing Economy.   The research found that relatively few of China’s current pool of leaders demonstrated strengths in the most important skill areas. The research found that almost one-quarter were deemed “weak” in the most important skills needed for success, with a further 57% demonstrating only adequate capability.  In addition, 55 percent of HR professional believes that new leaders are not adequately prepared for their roles.  In some ways this is no surprise.  China stopped all formal education during the years of the Cultural Revolution, losing a generation of educated leaders. To make up for this gap, at a time when leadership is critical to both economic and organisational success, Chinese companies are looking outside to import expertise.

“Australia’s prominent position in the Asia Pacific market and educated workforce suggests that it will represent a key source of talent for the growing Chinese market.  As China continues to focus on growth, many of Australia's top executives are likely to be lured offshore in search of greater career opportunities, unique exeriences....and money.  For some industries, like property and engineering, this has already started”, says Busine

So while the challenge for China is clear, there is likely to be a flow on effect in Australia where organisations will find it increasingly difficult to retain good quality leaders.  As globalisation takes hold, an ever increasing number of Australian executives will look offshore for career opportunities. In many instances, it is simply about market size and opportunity.  ”For years Australians took off with backpacks to explore the world.   In the future it’s likely to be briefcases” says Busine.

Australia’s microeconomic reforms over the last 30 years, together with the growth of the Asia Pac region and broader economic globalisation, have created a new set of opportunities and challenges for Australian organisations and leaders.  While a well considered and relevant retention strategy may have some impact, systematic leadership development and succession management will be critical to managing the on-going risk of leadership voids. 

According to Busine, “Safe guard against change; in many instances market opportunities will override the most thought-out retention strategy. Therefore, plan ahead, focus on succession and continue to develop talent from within. Ensure you always have an adequate benchstrength of leaders capable of driving the business in the event that leading executives are lured overseas.”