Ms. Linda Zhang, who was invited to participate in the SEB Forum, recently spoke with Chief Executive China to offer her personal perspectives on the recruitment, development, and evaluation of corporate executive talent, and the theories and models of her company.
Linda Zhang is a partner at Heidrick & Struggles, leading its Shanghai office and serving as the China CEO and head of its Board Practice, while also being a core member of the firm's Consumer & Industrial practice, focusing on executive search for key leadership roles in China. Prior to this, she was a management consultant at Bain & Company, advising Fortune 500 companies on market entry, growth strategies, and organizational and human resource development.
This interview was first published in Chinese in Chief Executive China in July 2024.
CEC: Does the strategy for executive talent management change with the stage of development of the organization? If so, what is the focus at different stages?
Linda Zhang: At different stages of development, companies have varying organizational and talent requirements, and their talent strategies will differ accordingly. Generally, we categorize a company's development into several stages: startup, growth, maturity, and transition.
In the startup phase, the company is nascent, and the initial core leadership's personal competence is crucial. With limited capital and resources to build complex systems, the focus is on pragmatic, short- and medium-term goals, with a rapid response to organizational structure, job matching, and personnel capabilities. Talent flexibility, resilience, self-learning, and iterative capabilities are highly valued.
During the growth period, rapid business expansion drives new needs for organizational and personnel development. Talent recruitment and training become key, with employee incentives, performance appraisal, and loyalty development gradually following suit.
In the maturity stage, with relatively stable business growth, companies typically have established human resource management structures and focus on long-term talent planning and leadership succession. Innovation becomes critical as businesses seek renewal or new growth curves,
requiring leaders to be forward-looking and creative, while maintaining team motivation and initiative.
In the transition stage, especially during challenges, mergers, or strategic transformations, leadership is pivotal. Leaders set the direction for transformation, guiding the organization through change with foresight and adaptability. Empathy and responsibility are essential to manage uncertainty and fear. Additionally, leaders must make tough decisions, including organizational reforms and layoffs, to build new capabilities and recruit talent for post-change business needs.
In summary, these four stages each have distinct focuses. Regardless of the stage, talent development, organizational structure, and culture are crucial for every company.
CEC: As you mentioned earlier, talent acquisition and development are crucial. What methods do you typically use to assess talent qualifications?
Zhang: At my company, we use a professional "Heidrick & Struggles Leadership Framework" to assess talent qualifications. Our approach involves four key dimensions:
- Relevant Experience and Expertise: This looks at the leader's past, focusing on their industry knowledge and functional expertise. Past experience and resumes provide insights into their capabilities.
- Leadership Skills: This evaluates the leader's present abilities. Leadership skills vary by function. For example, a sales leader and an HR officer
require different competencies. We identify the key leadership styles and qualifications that match the specific role and responsibilities. - Cultural Fit and Influence: This assesses how well the leader aligns with the company's mission and values. A leader's personal style and values
influence their team and overall organizational success. Cultural fit is crucial for both personal and organizational success. - Agility and Potential: This focuses on the leader's future potential. In a dynamic business environment, leaders need vision, adaptability, and
resilience. We evaluate their foresight, growth potential, and learning capabilities.
Our consultants, with extensive industry experience, deeply understand the client's business and goals before assessing a leader. They use in-depth
interviews and follow-up Q&A sessions to determine the leader's fit. Additionally, we employ various online and offline assessment tools to help
companies evaluate leaders' perceptions, personalities, and abilities, ensuring they are the right fit for the organization.
CEC: What is the relationship between internal cultivation and external introduction of talents? Is there a balance point? If yes, how to find
this balance point?
Zhang: Every company needs to balance internal training and external recruitment to meet its talent needs, but the right balance varies from company to company.
Why is internal training important? It helps reinforce the company's culture and supports sustainable growth. It also enhances the company's employer brand.
However, relying solely on internal development can be slow and resource-intensive. Internal training requires significant manpower, time, and financial resources. Moreover, in smaller companies, there may not be enough internal promotion opportunities or functional diversity for talent to grow. This can lead to talent attrition. For smaller companies, I suggest focusing internal training on critical functions, while considering external recruitment for less critical roles.
Additionally, the market is constantly evolving with new trends and fields. For example, e-commerce has rapidly transitioned from offline to online channels and from traditional to niche e-commerce. It's challenging to meet all the demands of these new functions through internal development alone. To keep pace with market changes, companies often need to recruit experienced external candidates.
Thus, both internal development and external recruitment are essential.
In my view, a ratio of 70% internal training and 30% external recruitment can help ensure the sustainability of the company's talent development system while maintaining organizational vitality. This approach allows the company to quickly acquire external talent, bring in fresh perspectives, and challenge the existing system and leadership, thereby testing the organization's overall resilience.
CEC: With the current trend of manufacturing moving to Southeast Asia, many companies are relocating their factories and sourcing offices to the region. What kind of changes do you think will take place in terms of the demand for talent from these multinational companies in this situation?
Zhang: The shift of manufacturing to Southeast Asia is a significant trend that has been ongoing for some time. As many companies build factories in Southeast Asia, India, South America, and Mexico to diversify their supply chains, there is a higher demand for local talent. However, if the local market lacks the necessary talent or the suitability is not high, enterprises need to consider sending talent from China or other markets to
these regions. Such talent must understand the local market culture and laws, as different markets have different industry trends, cultures, and regulations.
In the process of going overseas, Chinese enterprises should let go of the mentality of managing local enterprises with Chinese culture and take the initiative to make cultural cognitive changes, self-learning, and upgrading. When executives come to a new market, they need to look at the local “rules of the game” with an open mind and familiarize themselves with them as soon as possible to better lead the company to adapt to changes in the local market.
Additionally, the working style and methods of local employees in each country or region are diversified. Leaders can't directly apply the management methods of Chinese employees to manage local employees.
This requires leaders to have a certain degree of international vision, cross-cultural communication skills, patience, and empathy, a true understanding of the needs and motivations of local employees, and effective ways to manage and motivate to achieve a win-win situation.
Language and communication are also crucial. If the executives posted overseas have local language skills, it will be a great help to their work. However, not everyone can quickly master the local language in a short period of time. In cross-border management, leaders still need to have a passion for learning about local culture, people, and customs, and an open and tolerant mindset, so as to integrate into the local area and strengthen organizational cohesion.
Years ago, when foreign companies flooded into the Chinese market, the emphasis was always on the specificity of the Chinese market and its unique characteristics. Now, as Chinese enterprises expand overseas, it is crucial to understand, respect, and adapt to local characteristics in order to truly localize and become multinational corporations with effective local management.
In the context of Chinese enterprises going overseas, the development of supply chain talents is a topic that can't be ignored, especially when supply chain talents go higher and develop across regions. There are several abilities and qualifications that are crucial:
- Business Partner and Cross-Functional Communication Skills: No matter the function, the ultimate goal is always to meet customer needs. Today's business processes are becoming more streamlined, and the market demands faster responses from companies. The time from R&D to production to market launch is significantly reduced. Often, customer needs are conveyed through the front-end marketing or sales departments to other departments. Only through close interdepartmental collaboration can we develop products that meet customer expectations. Therefore, for supply chain professionals, the higher their role, the more they need to understand customer and business needs and possess the ability to work with various departments and communicate effectively. They should take the initiative to solve problems through cross-departmental collaboration, even when faced with strict requirements from other business areas. By actively responding and working together to find solutions, they can produce products that meet customer demands and drive business growth.
- Business Sensitivity: Supply chain talent needs to have strong commercial sensitivity and insight to serve as a strong support for the team, making up for the information gap between the supply and demand sides, and flexibly responding to changes in market demand.
- Digital Intelligence and Innovation Capability: As the supply chain transforms to intelligence, supply chain talents need to leverage digital and
artificial intelligence capabilities to optimize supply chain processes and uncover hidden business opportunities. - Big-Picture View and Global Thinking: Supply chain talents need to have a big-picture view and global thinking to integrate other forces and support their own business, ultimately forming a supply chain ecosystem. For example, SHEIN's flexible supply chain model is a good case. SHEIN does not hold all the factories in its hands but drives more sellers and industrial zones through the platform model, transferring international demand to domestic industrial zones and empowering suppliers to carry out digital transformation.
CEC: For suppliers, the market challenge is significant. We often hear suppliers say, "I want to make my company international and sustainable, but I can't find professional talent to help." What advice do you have for such companies?
Zhang: If a company lacks talent familiar with the local market, it can take two approaches. First, it can train employees internally, allowing them to rotate through different markets to quickly gain local experience, grow, and broaden their international perspective. Second, if the company wants to establish itself in the local market in the short term, it should also bring in talent that knows the local market. However, it's common for foreign talent to struggle with integration due to differences in thinking, cultural fit, and management styles. Many domestic companies, after experiencing failures, tend to rely more on internal talent. For overseas companies, successfully integrating external talent should be a long-term strategic goal.
In my view, in today's fast-changing market, talent acquisition strategies should be flexible and move beyond the traditional focus on "long-term loyalty" and "perfect candidates." It's unrealistic to expect imported talent to stay for five or ten years. When using external talent, companies should focus on short-term key goals, leverage candidates' relevant experience and strengths, and actively manage their weaknesses with additional resources and support. Managers should be pragmatic, clearly defining the responsibilities, expected outcomes, required support, and costs for external talent, rather than expecting them to be a one-size-fits-all solution.
Additionally, for domestic companies expanding overseas, the leadership's willingness to decentralize is crucial. External talent and company veterans need to integrate and build trust to develop. The complex relationships and interests in family businesses can pose significant challenges to integrating external managers. Companies should actively help external talent integrate into the organization.
In summary, successfully attracting and effectively utilizing external talent requires pragmatic expectations, cultural integration, and a healthy internal management system. It's a challenging but meaningful long-term task.
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