They also need to emphasise people as much as profits, due to the acute shortage of specialist skills in the region; the greatest challenge facing AP CEOs in the next three years.
These are key findings of research by talent management solutions provider Korn/Ferry, in co-operation with the Economist Intelligence Unit. The research polled more than 50 Asia Pacific CEOs on their evolving priorities against a rapidly changing business climate.
Korn/Ferry President, Asia Pacific, Charles Tseng said the most effective AP CEOs had a clear, strategic view of their current and future talent needs -- up to at least two to five years out.
"But now more than ever, Asian leaders need to take a more participative approach to talent management and developing the next generation of leaders in the region," Tseng said.
Be a 'people person'
"In the past, being a 'people person' in Asia was primarily seen in terms of an executive's ability to establish high level guanxi with influencers in China, or to demonstrate appreciation for the loyalty of long-time employees in Japan. Today's CEO needs to develop personal relationships with their staff at all levels to promote stability and loyalty, a far stronger retention device than money."
Staff management and development was ranked by CEOs as more time consuming than engaging with customers and suppliers or strategic planning.
The research also found that a greater percentage (29 per cent) of Asia Pacific CEOs now reported directly to the Board, compared to three years ago (21 per cent).
Nearly two thirds (62 per cent) of CEOs rely on executive coaching to improve their ability to effectively engage their staff.
Tseng said that Asia Pacific CEOs needed to become much more involved in identifying and engaging high-potential employees. They should be tailoring development programs and spending 'one-on-one time' with them to build their leadership bench, a radical approach that may take some getting used to for typically 'hierarchical' leaders in the region.
New leadership style
"As Asia becomes a more formidable player in the global arena, the time is now for a new style of leadership that will truly make the region the heart of international commerce."
Respondents also listed 'strong people development skills' as the key competency that would become more important for the Asia CEO in the next three years. Strong people development skills were seen as being as important as 'strong strategic thinking,' and more important than 'being able to work across cultures' or 'drive change.'
Managing a P&L was seen as the most important experience essential to prepare an Asian CEO for the role followed by creating human capital strategies, running a country operation, managing a crisis project, managing a global team and turning around a struggling part of the business.
Signaling Asia's significance, respondents' companies were equally headquartered globally in Asia as they were in North America (36 per cent respectively), with 26 per cent headquartered in Europe and two per cent in the Middle East and Africa.