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HR MANAGERS IN THE ASIAN CENTURY As Australia starts to realise the key role it can play in business in the Asian region, Peter Szilagyi considers some of the potential stumbling blocks - and how to create a cultural awareness toolkit

DID YOU KNOW THAT BY 2020 IT IS ESTIMATED CHINA

will have more middle-class consumers than the rest of the world combined? Over the course of the next few decades Asia will have a transformational impact on the rest of the world. The change will be felt across commercial, cultural and social divides and will evolve much faster than many of us realise. In just over 10 years Asia will not only be the largest producer of goods and services but also the largest consumer of them.

For Australia, and the organisations we work in, much closer ties with Asia will be an increasingly common theme. Asian partners will be ever more present in mergers, acquisitions, joint ventures, new market entry and offshoring. ANZ, Jetstar and Rio Tinto are leading organisations that have taken deliberate steps to grow their business throughout Asia, and many other companies are following suit.

Late last year the Federal Government released the Australia in the Asian Century White Paper. The White Paper is an important statement of the impact of Asia on Australia. With the release of this paper it is timely to consider our role and own effectiveness as HR managers in the Asian Century and the need for 'Asian literacy' within our organisations.

Cultural awareness A subject matter expert on China once commented that there is as much diversity in China as in Europe, with differences in language, culture, and cuisine. If we add all the other countries in Asia, we have an amazing yet

complex maze of cultures and ways of thinking. The good news is that there are some consistent patterns

within Eastern and Western cultures that give us a clue as to how we can flex our mindset and behaviours. These differences have been shown to be true across numerous studies and disciplines (eg anthropology, sociology, management and linguistics), and some classic studies include those written by Geert Hofstede, Edward Hall and Fons Trompenaars. While most studies are generalisations, they are a great source of information and we can think of them as a behavioural toolkit.

Cultural awareness toolkit According to Hofstede's famous study, there are several dimensions that allow us to differentiate between cultures: • Power distance: the degree to which hierarchy, level or

status are accepted in a society • Individualism versus collectivism: the degree to which

individuals take care of themselves (or family) versus the degree to which individuals expect members of a group to look after them

• Masculinity versus femininity: the degree to which assertiveness and material reward is valued (masculinity) versus the degree to which cooperation and modesty is valued (femininity)

• Uncertainty avoidance: the degree to which members of a society feel comfortable with uncertainty and ambiguity

• Long -term versus short -term orientation: the degree to which members of a society focus on short-term outcomes versus the longer-term and ongoing traditions

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Eastern cultures 'High context' Generally speaking... it is:

Western cultures 'Low context' Generally speaking... it is:

Cultural element DID YOU KNOW?

A recent study by

Right Management* highlighted that leading across cultures was a critical element of organisational success in the 'human age'. It often requires making decisions in complex or ambiguous environments, understanding cultural nuances and adapting one's style accordingly.

Leading Across Cultures in the Human Age

Low individualism

High individualism Individual versus collectivism _accepted that teams are greater than the sum ...accepted that individuals should be recognised

of individuals... for performance...

Uncertainty avoidance Low ...accepted that members of society feel comfortable with uncertainty and ambiguity...

High ...accepted that members of society feel uncomfortable with uncertainty and ambiguity.

Note: There are many differences between Asian cultures; for example, Japan would be higher on masculinity than China. For more information on Hofstede, go to http://geert-hofstede.com

Power distance

Time orientation

Low masculinity

Masculinity versus femininity ...accepted that cooperation and mutual agreement are important for success...

High ...accepted that authority should not be challenged...

Long-term orientation ...accepted that members of society have a focus on longer-term outcomes...

Low ...accepted that authority can be challenged or questioned...

High masculinity ...accepted that assertiveness and material rewards are important for success...

Short-term orientation ...accepted that members of society have a focus on immediate and quick results...

Viewed holistically, these intercultural differences are a pervasive and complex part of day-to-day life. Often when we are so focused on our daily work, we can miss small cultural differences. Silent disagreement, for example, may go unnoticed for extended periods of time. For HR managers involved daily in influencing stakeholders, managing conflict and communicating broadly, all of these dimensions play a crucial role. They play an equally important role in the design of programs we lead, such as employee engagement, talent management and organisational change.

Improving your own effectiveness The cultural awareness toolldt outlined in the table below is a great start to consider how you can adjust your mindset. The first step to make when working in Asia is to consider the culture first and develop a strategy that is mindful of the differences you may face. That way you are much more likely to succeed.

In 'low context' cultures, typically in the West, behaviours that are direct and forthright are familiar and preferred. These include 'speaking up', 'getting to the point', or 'being clear and concise'. Conversation is typically free-flowing, with people jumping in to speak often before a sentence has even finished. Debate is encouraged and conflict can be viewed as a source of creative tension. In contrast, for 'high context' cultures, typically in the East, conversation is not direct but can be 'circular', and inferences, suggestion and implication are part of the whole message. What is unsaid can carry more weight than what is said. In building your effectiveness, ensure you are conscious of your communication style, which can include listening more than speaking, pausing in conversation, and trying to understand the full message.

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Peter Szilagyi, CAHRI, GPHR,

HRMP, is an experienced HR

practitioner who currently works as

recruitment and talent manager of global projects at

Rio Tinto

Asian partners will be ever more present in mergers, acquisitions, joint ventures, new market entry and offshoring

COVER STORY - INTERNATIONAL HR

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When building relationships or managing stakeholders, be conscious of collectivism, hierarchy and long-term orientation. For example, ensure you are engaging all impacted stakeholders and your relationship is not only about work. Make time to have conversations, meetings or events that go beyond `processes, systems and projects'. Recognise that hierarchy and respect for position are even more important in Eastern cultures than in your own. While open and free debate may be encouraged in Western cultures, it may be dangerous territory. These points touch on the importance of `saving face', which is widely understood but arguably not well practised by Western managers.

When it comes to managing teams, be conscious of the importance of collectivism and femininity. For example, recognise the importance of achieving consensus and agreement before mandating decisions (both with your direct team but also those impacted by your work). Ensure you are managing, recognising and rewarding team performance as much, if not more, than individual performance. When managing teams to project timelines, be conscious of the importance of long-term orientation and risk aversion. Have an open conversation early on about risks, and adjust your own understanding, plans and tolerance levels.

Improving workforce capability The Asian literacy of your workforce is a critical capability for success in the next decade and beyond. This capability is not a 'one size fits all' and will mean different things to different organisations and workforces. For a sales force it might mean deep language and cultural expertise in particular countries based on export market exposure. Conversely, for cross-functional or project teams it might mean broad-brushed understanding of cultural differences.

The first step in building capability is to understand the external environment and company strategy. In your planning sessions, conduct a deep dive on strengths, weaknesses, opportunities and threats, with particular reference to Asia. Key questions to ask are: Where is the demand for Asia capabilities coming from now (and in the next five years)? What is the nature of this demand (specific or general)? Where is the supply of this capability in the current workforce?

Building this picture then allows you to understand where the talent gaps present themselves. Addressing them might mean: 1. Buying capability from the market through recruitment

(eg for graduates Asian studies could be important, or for senior managers Asian regional experience might be a 'must have')

2. Building capability through integrated corporate training programs, rotational leadership and talent programs or secondments for high performers

3. Borrowing capability through specific consulting or advisory services The other important consideration is the nature of your

HR systems and processes. Based on the tools outlined above, consider the degree to which your talent and performance management processes give equal or greater weight to high-context behaviours compared to low-context behaviours. How do your reward and recognition processes differentiate between individualistic versus team-based recognition? Finally, how do your corporate training programs handle differences in learning styles between high-context and low-context cultures?

Whichever the strategies deployed, important considerations should be focused on building the Asian literacy of your leadership teams and raising the level of awareness of your workforce to the opportunities presented by Asia. None of this is easy or quick! If you study the Asia expansion of ANZ, Jetstar and Rio Tinto you will see deliberate steps taken over many years that have now positioned them well to benefit from the Asian Century. If you are interested in reading more on workforce capability, the Asialink Asia Capable Workforce Study is an excellent resource.

Summary The Asian Century will be an exciting and turbulent period with many opportunities and challenges. Take the time to read the findings of the Australia in the Asian Century White Paper. It is an important guide to how Australia companies will interact with Asia in the future. On a practical level, think broadly about how your role will be a key enabler of the success of your business in this Asia-centric environment - and remember, when in doubt take a pause! Q3

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