The New Silk Road’s Need for Global Leaders

Articles

HCLI Research

Published 17 May 2018

The original Silk Road linked the West and East for 2,000 years as a means of trading goods. What cross-border leadership skills will the latest One Belt, One Road initiative require?

The One Belt, One Road (OBOR) initiative is about building infrastructure, namely in the transport and energy sectors. OBOR was first proposed by China President Xi Jinping in 2013 and once completed, is estimated to cost US$5 trillion. According to PwC’s China’s new silk route: the long and winding route, its purpose is to “increase connectivity between the Asian, European and African continents. The intention is for this increased connectivity to enhance trade flows and spur long-term regional economic growth and development, benefiting all those involved.” The report also notes that OBOR is important for China’s long-term development strategy and a way to influence and evolve its economy.

With an increasing focus on nationalism and countries turning their focus to their individual economies, China’s strategy stands in contrast. In fact, according to “Your guide to understanding OBOR, China’s new Silk Road plan”, author Zheping Huang explains that US$40 billion in capital is being donated by the Chinese government to the Silk Road Fund. Two Chinese policy banks, the China Development Bank and Export and Import Bank of China, are also putting money up. In addition, two multilateral institutions led by China, Asian Infrastructure Investment Bank (AIIB) and New Development Bank, are also financiers. AIIB has registered capital of US$100 billion and the New Development Bank has US$50 billion in starting capital. Huang also explains, “In 2016…the AIIB approved US$1.7 billion in loans to nine development projects along the Belt and Road.” Lastly, Chinese investors are putting up capital as well.

The need for global Chinese leaders

It is one thing to pour financial capital into the OBOR initiative. It is also critical that human capital be built up for the initiative’s success.

In particular, as OBOR takes China global, there is a need for more Chinese talent who can work and lead across borders. What does this entail?

According to Leadership Mosaics Across Asia, there are four key qualities that global leaders have. They are:

1. Comfortable with discomfort

They must be comfortable with navigating a discomfiting business environment. The Economic Intelligence Unit notes that “one of the most distinct features of the Belt-Road is, somewhat ironically, an inherent ambiguity. Although projects emerge that are attributed to OBOR, publicly released official documents tend to paint the initiative in broad brushstrokes, providing more by way of general conceptualisations than detailed specifics.”

Given that there is some uncertainty about what the new Silk Road will look like and how it will function, talent exploring opportunities along it – and tasked with realising these opportunities – will need to be able to lead and influence in a volatile, uncertain, complex and ambiguous environment.

2. Relationship builder

They must be able to build good relationships across organisational boundaries. Externally, boundaries exist between a business and its stakeholders. For example, there are boundaries between government and society. In global organisations, a critical boundary also exists internally, between global headquarters (HQ) and the local offices. Often, decisions are made at the HQ but lack alignment to local context and challenges. In such a scenario, talent based in the local offices need to sell up their ideas and solutions, and influence their counterparts in HQ. To do this effectively, a relationship of trust needs to exist between the parties on either side of the boundary.

3. Be adaptable, but authentically so

They must be very adaptable. They will come across cross-culturally ambiguous encounters, and they need to deploy different approaches to solving problems, depending on what is feasible in a particular regulatory market and business landscape. Yet, completely assimilating to a host environment robs leaders of their unique differentiator and value, and can even trigger personal dissonance. Hence, authentic adaptation requires a high degree of self-awareness, maturity and wisdom. For OBOR, the challenge for talent will be doing so – at scale. In a recent McKinsey podcast and article, “China’s One Belt, One Road: Will it reshape global trade?”, Kevin Sneader, McKinsey’s Chairman of Asia and Hong Kong reminds us that OBOR is “very ambitious – potentially ambitious – covering about 65 percent of the world’s population, about one-third of the world’s GDP, and about a quarter of all the goods and services the world moves”.

4. Willing to make “sacrifices”

They must want to be a global leader, even if that includes making concessions. Are they hungry enough to move out of their familiar home environment, challenge themselves and stay in a foreign (even potentially hostile) host country for a few years?

Are Chinese talent ready to go global?

Chinese talent are familiar with discomfort, their home market hardly being stable and predictable. It is an inherent advantage as they navigate the Belt and Road routes. Where they may need to overcome gaps are in thinking strategically and creatively. Many are used to working in a hierarchy, doing as they are told, and grew up in a school system that does not encourage open exchanges of opinions, which is a critical ingredient for creativity.

Chinese talent also need to develop a communication and working style that translates across cultures. They may be used to keeping silent while chipping away at issues, but often the lack of communication seeds distrust with others. To some cultures, they may also come across as too impatient to get things done. This causes stress for others, which can result in a backlash.

Very critically, Chinese talent need to accept that they have to adapt to other cultures.

They have to set aside all self-centredness and a need to prove they are right, and listen and learn from others. While China has enjoyed rapid economic success and the ‘Chinese’ way has its merits, humility is very important in cross-border business exchanges.

To support business growth along the Belt and Road routes, the Human Capital Leadership Institute in Singapore has signed an MOU with Shanghai Foreign Services Group, a state-owned enterprise to develop more global talent and leaders for the region, from the region. This is encouraging news, for investing in talent and human capital is a must, on top of the financial muscle that has been exercised.