Vish Jain, who heads a new centre at Boston Consulting Group that helps companies globally address their chief concern today – leadership and talent development – shares his wide-angle lens on the issue with Raini Hamdi
Vish Jain, partner, Boston Consulting Group, Singapore
How deep-seated is the issue of leadership and talent development?
Our latest (annual) survey of 4,500 companies around the world shows it is top of mind for CEOs globally. It’s what they are most worried about and also the issue they feel they have the least capability to manage.
Where does it stem from?
It’s from the whole retirement of the baby-boomers (those born after WWII, in particular 1947-1955), by 2015 or so, and the shift to the next generation of leaders.
The second layer is also tricky because it skips a five- to 10-year period. So the 65-year-old retires and the handover is not to a 55- to 60-year-old, but to a 45- to 50-year-old, in order for the new guy to have a 10-year run in the organisation. If you promote a 55- to 60-year-old to the job, you will have another succession problem five years later.
And the new leader is managing a much younger workforce – isn’t that part of the issue?
Yes, they in turn are managing Millennials raised in the Internet age. (Gen Y’ers, also called Millennials, are those born from the mid-’80s, and are now the fastest-growing segment of the workforce globally.)
Anytime you have a major generational shift in leadership, it takes time to stabilise things. You’ve had a guy who has been in the company for 30-40 years handing down to someone 10-15 years younger, as you should. But there is a big gap in experience and, further down, another big gap. So how do you create the affiliations and capabilities through the entire pyramid?
Is it across the board or specific to certain countries in the region and certain industries?
It is across Asia in general and across industries from hotels to mining.
The growth of markets and opportunities is many times faster than the growth of people. Asia wide, most companies have doubled or tripled their business in the last 10 years, but the number of leaders has not doubled.
In industries such as travel & tourism where there are lots of small players, how do you create the people engine? A couple of years ago, Bangkok had more five-star rooms than all of India put together! The industry is pretty sub-scale, with different pockets. The bigger guys are able to achieve the scale required to have in-house HR development, programmes to rotate leaders and grow them, but the smaller guys struggle.
Companies also feel that while there are new opportunities in the unprecedented growth of the middle class in Asia, they don’t have good people who can grab hold of these opportunities.
But isn’t it easier for other industries than, say, hotels, to attract talent?
It is not specific to hotels. Apart from two or three industries that suck up top talent quickly, such as the financial services – yes, even after Lehman – consumer goods and consultancy, all others compete for talent. In some countries, travel & tourism in fact has a good reputation. If you go to Thailand or the Philippines, there are decent-size schools and universities that have travel & tourism programmes and they do well. I agree though that in Singapore, graduates won’t necessary think of it as first choice.
“There is a bracket that is attractive from the point of sexiness of the job, salary, etc. Then there’s all the rest. Travel & tourism falls into all the rest.”
Perhaps travel & tourism does not pay well enough for the long hours it demands.
I don’t think that salaries are systematically lower in the industry. Again, there is a bracket that is attractive from the point of sexiness of job, salary, etc. Then there’s all the rest. Travel & tourism falls into all the rest. We have conversations with the engineering industry – they suffer as well. All the good engineers want to be bankers and consultants. I’m an engineer by training; look where I am (laughs).
The most important thing for companies to realise is, it is a competitive marketplace. Just like you compete for customers, you need to compete for talent. That whole social contract ‘you join me, stay 10-15 years, then you get into management position’ – that’s gone. The new generation does not think like that.
The Millennials – to some, it’s like they are from Mars, aren’t they?
(Laughs) Yes, they want to be engaged, affiliated, recognised for their talent much faster than a generation ago. There are positives and negative sides to this –sometimes you just feel like telling them, hey, you’ve got to earn your chops a bit (laughs). But they have much lower patience for some of the stuff we went through. And you’ll see the next people coming in, those born in the ’90s, and all this is amplified.
There are entire societies which don’t even like a job structure. They are freelancers – this whole acceptance of I get my work day-to-day and survive on it. It is this whole shrinking of time frames in the minds and their ability to take risks. I would be terrified not knowing where my next month salary is coming from, but these guys are able to take that kind of risk. And it is not as if they are not getting hired or retained. It is not as if they are not intelligent. In fact, they are much smarter than the previous generation. They know the Internet, they studied high school what we were studying in university, so the quality is much better.
To engage them, keep them focused, interested, energised, motivated, challenged, recognised, accelerated – that is what any industry should be doing.
What are some industries doing?
Banks, for example, are now fighting for the young customers with an entirely new proposition, so that these people will stay loyal to them 10 years down the road.
Frank by OCBC in Singapore is a good example. They design the entire banking experience from the ground up based on how the young people think. So the design of the shop does not look like a bank branch at all. It has a massive LCD screen where you can choose the design of your credit card – these people are used to choice with the Internet. There is also a lot of online social communication and engagement as well.
What companies don’t do enough is take the same ideas on the customer side and apply that on the employee side. But it’s not as straightforward as using social media and then you’re ‘on’.
I’m helping a CEO on Gen Y engagement, for example, how to use Twitter and social media to engage staff.
One finding is they don’t trust leaders; they are used to corporate scandals. So you’ve got to build their trust first on non-work stuff before gradually dropping some work-related stuff, then withdrawing again. You’ve got to orchestrate it completely in a different way.
The rules are the same but it is trying to understand what drives the engagement for them.
