30-Mar-2015 Jakarta / Indonesia
Wanted: Leadership skills in a globalizing world
Article by Allan Yong, President of Henkel Indonesia, which was published in Jakarta Globe on March 23, 2015.
It has been predicted that Indonesia, which is already in the top 10 of the world’s biggest economies, has the potential to become the fifth-largest economy in the world by 20301. This forecast of hyper growth over the next 15 years has put the talent shortage the country is currently facing in the spotlight. And if this shortage is not being addressed it could get worse over time.
A joint study by the International Labour Organization (ILO) and Asian Development Bank revealed that, operating under the ASEAN Economic Community, Indonesia could have more than 13 million under-qualified workers in high-skilled jobs in 20252. This potentially dire scenario of mismatched skills has raised concern among senior executives, who have identified nurturing talent and leadership development as the top two people challenges in Indonesia, according to a survey conducted by The Boston Consulting Group (BCG) and the World Federation of People Management Associations3. BCG also warned that Indonesia could face a severe shortage of middle managers by 2020, a situation which would hinder business performance and hurt employee morale.
The lack of managerial and leadership expertise doesn’t only concern Indonesia, but more generally affects emerging countries which accounted for 44 percent of Henkel’s total sales in 2014 and where the company has set its strategic goal to reach sales of 10 billion euros by 2016. Previously mainly operating as production, sales and marketing centers, Henkel’s entities in many emerging markets, including Indonesia, are now transforming into strategic business hubs, working with customers and value-chain partners on long-term innovation and sustainability projects. Like Henkel, many companies in Indonesia are shifting towards or expanding in offering higher value manufacturing solutions and services. The changing business landscape – along increasing connectivity and digitization, and a volatile global environment – is redefining the talent requirements for future business success.
More than ever before, there is great urgency to have good managers and leaders across the organization who possess the agility to adapt and innovate, manage change and complex relationships, make decisions and inspire their teams.
Therefore, Henkel has introduced five leadership principles, which provide the framework for the development and evaluation of its leaders. The principles are: lead myself, lead team, lead performance, lead stakeholders and lead change. They define the excellent leadership skills that Henkel aims to instill in its managers globally and especially in emerging markets such as Indonesia.
Specifically, Henkel is accelerating its talent development program in order to fuel its management and leadership pipeline. For example, high-potential employees in Indonesia participate in the Accelerated Growth in Leadership Effectiveness program with other high-potential colleagues in the Asia-Pacific region. By working in cross-cultural and cross-divisional teams on actual business cases and in close contact with the senior management teams during a period of eight months, top talents are being prepared to assume bigger roles and senior positions in the future.
Furthermore, as Henkel prefers to promote employees internally, our managerial staff in Indonesia has grown substantially over the past three years. This has also resulted in an increase in the share of women in managerial positions in Indonesia to 24 percent in 2014, from 10% in 2011.
For the business community and investors, the Indonesian government’s ongoing commitment and success in expanding and improving the quality of the country’s education system will provide the critical drivers for enabling a skilled and competitive workforce. Companies, too, must play active roles by putting in place talent management programs tuned to the needs of a rapidly globalizing business environment. In this context, Indonesia’s workforce and industries can become competitive internationally, which is fundamental for anchoring the country as one of the world’s leading economic superpower.
1 Press release: UK to fall out of the world’s top 10 largest economies by 2050
2 ASEAN Community 2015: Managing integration for better jobs and shared prosperity
3 Tackling Indonesia’s Talent Challenges