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China: Looking to the Next Horizon

Are Chinese leaders wired for new futures?

China’s maturing economy has reshaped the business landscape—and consequently the future leadership needs. This means managing and developing the mix of generations in the leadership ranks now.

“Emerging Chinese mid-level and operational leaders—the next generation of senior leaders—exhibit personality profiles that differ from incumbent executives. This represents, in part, the natural ascension of leaders with facilitating traits (e.g., learning orientation); but, in some areas there are consequential differences.”

China: Looking to the Next Horizon

China’s Economic Outlook

China has long been one of the world’s fastest-growing economies. As this economy matures, both top- and bottom-line growth have slowed, reshaping expectations and shifting the importance of different industry sectors. Three key trends include:

  1. The surge of service industries within China’s economic base, while manufacturing continues a steady decline.
  2. Recognition that global diversification is necessary for sustainable growth, driving expansion outside of China.
  3. Rapid emergence of younger leaders with new expectations, dramatically reframing the composition, value sets, and expectations of tomorrow’s workforce.

We considered the collective orientation of mid-level through C-suite Chinese leader candidates to step up to new paradigms in light of personality characteristics aligned to these trends.

Evidence

New-Gen Versus Incumbent Senior Executives—Emerging Chinese mid-level and operational leaders exhibit personality profiles that differ notably from incumbent executives. To some extent this reflects the natural ascension of leaders with facilitating traits (e.g., learning orientation). However, there are consequential differences. Mid-level leaders are more analytical and prudent, helping them anticipate and avoid business landmines. Yet, they fall behind on growth enablers like ambition and strategic orientation and are more vulnerable to conflict avoidance and overconfidence. These patterns may be rooted in cultural legacies of hierarchical authority structures and decision making.

Evolving Relationship Paradigms—Global expansion heightens the need to listen to diverse perspectives, and share feelings to build trust. Service sector growth also relies on stronger empathy and expressions of appreciation. Chinese leaders are much lower than global peers in interpersonal sensitivity. They may be less likely to seek input and recognize contributions, leaving employees feeling misunderstood or customers undervalued. Left unchecked, these blind spots can limit cross-cultural engagement and partnerships.

Motivating Cross-Generational Talent—Chinese leaders are notably high in prudence, contributing to strength in driving execution. Limiters lie in a tendency toward arrogance and insensitivity. These patterns can produce a more directive, less seeking coaching style, which may prove unpalatable to millennial associates.

Overall Derailment Risk—Chinese leaders exhibit significantly greater derailment risk than global peers in the six factors on the “Derailment risks” graphic. These become vulnerabilities as leaders transition to the expectations, exposure, and scrutiny associated with increased presence on a global stage.

Action

  1. Given the natural selection of more prudent next-generation leaders China-based companies might want to shift to flatter organizational structures. These structures encourage more agile, empowered decision approaches that would be for cross-border entrepreneurial pursuits. Hierarchical decision-making legacies will be hard to displace without systemic structural intervention.
  2. Focus on selecting future leaders who are motivated to sharpen their cultural emotional intelligence (EQ) and interpersonal sensitivity. The next generation will need to be able to both “think globally” and “act globally” regarding collaboration, influence, and talent development.
  3. Shore up evergreen interpersonal fundamentals for both incumbent and emerging leaders, particularly in trust-building essentials such as demonstrating empathy and recognizing and disclosing personal thoughts, feelings, and rationale. These highly developable skills will help optimize relationships both within and across organizational, generational, and functional boundaries.
  4. MNCs and indigenous organizations should help their leaders identify their personal derailment risks and build self-management techniques. When they become more acutely aware of their own tendencies, leaders can anticipate and avoid personal derailment triggers.
  5. Create a sense of urgency for new coaching and development paradigms for emerging talent. Chinese organizations can capitalize on talent through flexible approaches to coaching, developing, and motivating young talent, especially millennials. Training Chinese leaders in less directive coaching practices (e.g., leveraging provocative inquiry) also may help.
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