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an almost intrinsic binding force in an increasingly specialized, far-flung and self-managed world.

Paul Buller, professor of manage-ment at Gonzaga University in Spo-kane, Wash., sees it this way: “H.R. needs to become an internal consul-tant and change agent to facilitate vertical and horizontal integration, so that everyone in the organization sees how what they are doing is con-nected to the big picture — a ‘line of sight’ that allows for continual adap-tation. This would provide a unique source of competitive advantage that would be hard to imitate.”

Some predict that were human resources to become a more widely integrated competency, it would en-gender an osmotic permeability be-tween H.R. and line management. Eventually, the distinction between the two would vanish. Laurie Ruet-timann, a recruiter, trainer and founder of HRM Today, a social net-work for human resources profes-sionals, put it succinctly: “H.R. [will be] fixed when it ceases to be H.R. and starts to be a core and critical management responsibility. [H.R.] shouldn’t serve the business. We should be the business.”

one disputes that talent manage-ment, workforce productivity, lead-ership development and a high- performance culture are crucial to corporate performance, few agree about how, or even whether, person-nel departments influence those fac-tors. As a practical matter, some are suggesting that it’s time to back off the demand for strategy with a capi-tal “S” and seek a more straightfor-ward, results-oriented model.

“The way to become a business partner is to quit agonizing over be-ing a business partner and trying to force unnecessary activity on the rest of the enterprise,” said Dan Bowling, former global head of human re-sources at Coca-Cola Enterprises.

“Focus instead on what is important.”One alternative model that has

gained some traction envisions hu-man resources not as a single de-partment trying to morph itself in multiple directions, but rather as competencies embedded company-wide, sometimes as discrete job functions, but more often as distrib-uted responsibilities in which every employee has a human resources component to their job. This model, in short, casts human resources as

K o r n / F e r r y

HAPPY ENTREPRENEUR, HAPPY COMPANY

A recent survey of 3,000 high-impact entrepreneurs in 34 countries suggests that those in China, India, Kenya, New Zealand and the United States have the most positive overall opinions of the policies in place to promote their growth. The five countries surveyed with the most nega-tive overall perceptions are Greece, Venezuela, Ukraine, Andorra and Poland. Source: MonITor Group

The Latest Thinking

The nature of economic growth has changed. From the mid-1990s to 2007, developing

economies — especially those in Asia — experienced a period of growth un-matched in scale, optimism or speed. This era can be characterized as one of “easy growth.” During this time, it became easier and cheaper to gain access to capital than in any other pe-riod in history, globalization created unprecedented admittance to new markets and consumers, and house-hold consumer borrowing drove spending around the world. A gen-eration of corporate leaders was shaped by this period, when growth was there for the taking; all they had to do was show up.

And now, suddenly, that era is over (see Figures 1 and 2), and we have entered the era of “smart growth,” in which growth is slow but change is fast. In his recent report, Smart Growth: Is Asia Ready?, Korn/Ferry leadership and talent consulting managing director Indronil Roy ex-plained how this period of complex-ity and uncertainty — in markets, finance and currency — will require leaders to think and act differently to unearth growth where none is evident. Leaders’ shrewdness about growth will make a difference in corporate performance.

How long will smart-growth con-ditions persist? A resounding num-ber of CEOs believe these conditions will last for the rest of the decade, if not longer, for myriad reasons. The global financial crisis led to a stricter regulatory regime that is (some-times justifiably) constraining risk

Growth Now: Focus on Minds, Not Markets

9B r i e F i n g s o n T a l e n T & l e a d e r s h i p

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Figure 2: gDP growth in DeveloPeD economies

Figure 1: gDP growth in emerging/DeveloPing economies

in smart growth. In a recent study of leaders at 14 companies across Asia, Korn/Ferry found that two sets of characteristics indicate smart-growth readiness, or lack of it: leadership maturity and learning agility.

Leadership Maturity is an indi-vidual leader’s ability to operate ef-fectively at high levels of complexity, ambiguity and scale. Korn/Ferry

a leadership team that can carve out growth where others may see no hope. This view makes leadership more complicated and nuanced, but also more powerful: It holds that leaders, not market conditions, de-fine the limits of growth.

But which leaders, exactly? Those who drove high performance in easy growth will not automatically excel

taking. Regulatory pressure on the banking system in particular is re-ducing the risk capital available. Si-multaneously, rapid reduction in consumer debt, stubborn unemploy-ment and wage stagnation in the West continue to drive down con-sumer demand to a degree that can’t be offset by the rise in emerging-market consumption. Increasingly focused on costs and their bottom lines, corporations are reducing in-vestments. And, finally, the momen-tum of globalization has slowed, if not reversed. Some governments are reverting to a protectionist agenda and erecting higher trade barriers to satisfy domestic political pressures.

“My executive team is wired for easy growth,” one banking CEO in Asia explained. “In the 20 years that they have been in management roles, growth was a given. Even at the depths of the Lehman Brothers crisis, we knew that if we could just hold on to our basics long enough, the tide would turn. My team is still waiting for the tide.”

Like him, many CEOs are grap-pling with a vital question: How can we create growth where there appears to be none? Is there a combination of inventiveness, courage, wisdom and skills that can accomplish that?

As a first step, businesses must make a mental leap, moving away from the notion that growth exists in certain markets and toward the idea that growth emerges from cer-tain leaders. In fact, it is increasingly hard to find markets that grow at a double-digit annual pace. Instead, organizations must look within for

Growth Now: Focus on Minds, Not Markets

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The Latest Thinking

the shiFt in skill anD minDset For growth leaDers

Business Growth Business Growth

GDP/Market GrowthGDP/Market Growth

•Leadershipmindset:Growthisinthemarket •Leadershipmindset:Growthisintheleaders Picking the right product — market strategies will Building leadership capacity is crucial give us growth for growth.

•Participate •Innovate Find the growth markets and get in as early as possible. Create new demand and build new market spaces.

•Fuel •Sharpen Feed growth engines with more resources and investment. Build growth engines that are resource-efficient and lean.

•Goodenough •MustHave Responsive to customer expediency, not insight. Use deep customer insight to drive customer urgency.

•Specialize •Collaborate Get specialized teams to execute with expertise. Get diverse teams to work together and create the new and different.

Easygrowthleadership

Smartgrowthleadership

a higher rate of top-line growth. Businesses routinely talk about

talent being their most important as-set, but without a clear analytics and benchmarking platform to measure and value talent assets, that narrative often lacks conviction.

Korn/Ferry’s smart-growth re-search provides a new framework for investigating how leadership is linked to growth. It may provide the much-needed tools to ascertain the true value of leaders and leadership teams.

Investors, boards and stakeholders will continue to push management teams to quantify and benchmark talent assets to support evidence-based decision making, as they should. Businesses that excel in this area of competence will see real advantage in the marketplace — to paraphrase Warren Buffett — as the others are left dangerously exposed by the retreating tide of growth.

Taken together, these are the best factors for predicting smart-growth readiness. Both can be measured fairly and accurately, and benchmarked against leaders in the relevant indus-try and markets — pragmatic consid-erations if they are to be used in business. Both can be developed in individuals, giving organizations a way forward to enhance the competi-tiveness of their leadership teams.

The aggregate maturity and agil-ity of a leadership talent pool point toward a company’s ability to drive growth rates over and above those of normal market participants. Broadly speaking, the ratio of those with high scores in maturity and agility to those with low scores reveals a busi-ness’s overall “smart-growth capacity.” Korn/Ferry examined both head-to-head competitors and markets with multiple competitors and found that a higher group score means that or-ganization is far more likely to have

measures this with an assessment that examines the communication, decision-making and operating styles of executives. Think of maturity as the indicator of a seasoned executive, someone with experience in complex situations who handles challenges with grace. Given the shifts under way, maturity will be paramount.

Learning Agility is an individual leader’s ability to operate effectively amid disruption, speed and volatility. This is measured with Korn/Ferry’s viaEdge assessment, which analyzes interpersonal skills, self-awareness, deftness with complexity and change, and the ability to deliver results in first-time situations. Think of agility as an indicator of a fast-learning ex-ecutive, someone who knows what to do when he doesn’t know what to do. Given a fast-changing environ-ment in the smart-growth era, agility will be the other differentiator among leaders.