The 21st century is set to become the Asian Century if the continent’s political and cultural dominance continues at a rate anywhere close to what we’ve witnessed so far.
The economic dimension of this dominance is easily summarised in GDP growth rates which are according to the World Bank outperforming the English speaking world consistently over the last five years.
China being the golden child of Asia’s economic boom has produced nine of the 20 most valuable internet companies globally according to Kleiner Perkins 2018 Internet Trends. The fact that only two of the nine companies existed five years ago suggests that one can expect more Chinese giants to break into the global tech top 20 soon.
While it is easy to dismiss the success of Chinese tech companies in the eye of population scale and an unfavourable market environment for Western competitors, it is undeniable that digital strategy and execution of these new tech giants have been world-class. It is crucial for Western executives to make an effort understanding the cultural differences of leadership, decision making, and strategic planning in the boardrooms of emerging
Asian markets if any of the following scenarios are a possibility over the coming years:
- Your company expands into one of the emerging Asian markets.
- You are in charge of making management hiring decisions in Asian markets.
- You expect Asian competitors to enter your local market.
While cultural nuance in leadership is an incredibly complex topic, some patterns can be considered by Western decision-makers as a reference point.
Historical and Academic Insights
Century-old textbooks about leadership and decision-making provide historical context and are an indicator of underlying cultural influences.
“On War” (1832) is one of many publications by Prussian general Carl von Clausewitz discussing his experience in formalising strategy. He advocates a dialectic approach of decision making, emphasising consensus and discussion to arrive at a conclusion. An approach that delays action in the interest of rational analysis with a strong focus on strategic goals.
Sun Tzu’s “The Art Of War” on the other hand is China’s most prominent publication in military strategy and dates back to the 5th century BC. Sun Tzu provides insights designed to allow for strategic situationalism, the ability to create momentum through improvisation on the battlefield. His focus are people and operating values with objectives being a secondary consideration.
This sentiment is echoed in “Chinese and Western Leadership Models: A Literature Review” which analyses academic research conducted between 1979 and 2014. The study identifies a significant cultural divide between China and Western countries. Chinese leadership culture is a reflection of China’s emphasis on community and family; a stark contrast to ongoing human rights controversy. Corporate Chinese leaders often follow a humanistic approach that puts people and ethical considerations first. Confrontation is avoided in the interest of social harmony.
While it is evident that both management cultures are increasingly adopting each others traits, the study concludes that “Western leadership models could benefit from increased emphasis on humanistic factors and reduced prioritisation of rationality, while Chinese leadership concepts can be expected to increasingly emphasize “scientific management”, including innovation.
The features of leadership styles are also reflected in the approach to the strategic planning process. “East vs. West: Strategic Marketing Management Meets the Asian Networks” is an article published by researchers at the Singapore Management University in 1999. The research outlines that the Asian strategic planning process is often “ad-hoc and reactive” with executives often seeking qualitative information supplied by their network of personal relationships. Speed is a key feature of this approach as the manager carries the decision-making burden without seeking broader consensus.
The authors reference the anecdote of an unnamed Hong Kong businessman who responded within fifteen minutes to an offer by Li Ka Shen, Chairman of the Hutchinson/Cheung Kong, to enter into a major joint venture. Li’s in-depth knowledge of the markets under consideration and his judgment were enough for him to make such a rapid decision.
Does leadership need to evolve?
It is inevitable that globalisation will continue to blur the cultural borders of the world. Business leaders have now the opportunity to be proactive about this shift. Cultural awareness is no longer a buzzword to sell diversity to potential employees; it is a leadership strategy.
Self-awareness and the ability to switch styles based on the situation on hand will offer business leaders a competitive advantage, no matter if they operate in Asia, in Western markets, or both.
Our global digital economy has made uncertainty and disruption part of every-day business life. Faster decision-making, a greater focus on people, and stronger informal networks in addition to their analytical and results-focused approach might just be what Western business leaders need in order to succeed in the Asian Century.