Are you good enough to lead an emerging market business?
The qualities necessary to run a major business are well known. Leadership competencies are described in countless articles and business school texts. But it is becoming increasingly apparent the component parts of business leadership in an emerging market are somewhat different.
Differences are highlighted in any search for top talent on behalf of a multi-national or a major in-country organisation seeking big emerging market growth.
The need for special talents in special circumstances has long been appreciated, though the corporate lifecycle generally provides the context.
At start-up stage, the emphasis may fall on entrepreneurial flair, drive, personal charisma and perhaps the ability to bend some rules (and get away with it).
At a mature business, the board may prefer industry experience, a proven track record and the ability to get the most out of people, deliver efficiencies and optimise the current asset base.
Lifecycle considerations make it possible – to some extent, at least – to follow a proven formula when establishing an appropriate leadership profile.
However, after many years of identifying, pursuing and placing emerging market business leaders, it is clear no readymade formulas apply in this challenging arena.
The initial base of competencies is similar across all markets, however. Core requirements are:
- Commercial acumen and financial/accounting savvy
- Hard-core technical knowledge and skills
- Systems and digital knowledge
- Diligence and hard work over long hours
- Meeting deadlines and driving results
- Brutal honesty
- Exceptional motivation (being a self-starter)
Such attributes are a great start, but won’t take you the whole nine yards in an emerging market. Here, leaders face additional business headaches.
These markets are prone to financial crises, intellectual property rights are insecure, bureaucratic delay is endemic, infrastructure, products and services are unreliable, local talent is sparse, assessing customer credit worthiness is tough and distribution channels can be messy.
What’s more, corruption may be widespread while performing due diligence and background checks can be difficult.
An additional overlay of leadership skills is required, featuring …
- An ability to deal with ambiguity (poverty eradication may be a priority for local elites that nevertheless entrench poverty through corruption)
- Transformational vision (a business becomes an agent of socio-economic change, requiring a leader to commit to human and community development)
- Entrepreneurship and innovation (transformational solutions demand new ideas with profit potential; e.g. transactional banking by cellphone)
- External awareness (businesses address ‘non-business’ issues; e.g. by supporting education in maths, science and IT)
- Versatility (bosses multi-task in skill-starved markets)
Many commentators spotlight differences between the Eurocentric business model (focused on profit maximisation) and the Afrocentric equivalent (focused on care for human relationships, employees and communities).
These drivers may be more complementary than contradictory.
We increasingly see the internationalisation of emerging market businesses. A listing in a major financial centre is a solid indicator the business delivers substantial returns – yet it is supposedly ‘overloaded’ by additional ‘baggage’ such as care for communities and a mission to tackle educational and other backlogs.
Such companies are redefining business sustainability while deepening the appreciation of what it takes to deliver long-term profits. To do it, they require exceptional leaders with exceptionally wide competencies.
Clearly, it takes a lot to lead an emerging market enterprise. Have you got what it takes?
This article was published on the following:
- Sunday Weekend
- Business Essentials
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