Over the last two decades, double-digit growth primarily fuelled by the manufacturing sector enabled China to enjoy success even with moderate levels of leadership capability. However, the shift to a knowledge-based economy has changed the face of leadership in China and significantly raised the bar for both Chinese and European leaders to achieve success.
Human capital challenges, along with the Chinese economic slowdown, are seen as the biggest pressures that SMEs and larger European companies currently face in China according to this year’s EU Chamber Business Confidence Survey. Attracting and retaining a very difference generation of young employees now requires higher levels of integrity and a clearly articulated and compelling vision and values.
In this research, we analyse the leadership profiles of 20,184 mid-level and senior leaders across 18 industries, and compare Chinese senior leaders within foreign companies in China with senior leaders in a number of European countries. We also identify the most essential leadership practices for highly effective leaders in China.
Rather than purely identifying gaps of Chinese leaders, the research aims to focus on and leverage both similarities and differences between Chinese and European leadership practices [attributes]. As European SMEs operating in China continue the shift to rely more on Chinese leaders, they will benefit from better leveraging their strengths and more carefully considering how to form a cohesive and effective top leadership team made up of both European and Chinese leaders. Looking across all the countries included in this research, there are significant similarities between European and Chinese senior leaders in a few of the leadership practices most important for effectiveness, including: being strategic, persuasive and having management focus. Once these common strengths are recognised there are a number of ways that they can be further leveraged.
Compared to European leaders, Chinese leaders exhibit strength in the area of empathy, which is essential in creating a culture that will attract generation Y and Z and is also instrumental for developing a global mind-set. Compared to Chinese leaders, European leaders exhibit strength in being innovative, now a requirement for SMEs in China to differentiate themselves and continue to grow. There are also some common areas for development across both Chinese and European senior leadership, most notably in the area of communication and cooperation, which will require letting go of higher levels of control.
The research provides more specific and detailed comparisons between Chinese leaders and leaders in 5 European countries, including: Germany, France, UK, Spain and Poland. Based on the findings, specific recommendations are provided for SMEs to empower their Chinese leaders and recognise and leverage the strengths of both Chinese and European leaders. SMEs can use these insights to form more cohesive and effective leadership teams, and begin developing toward the leadership profile that will be required for future success across both China and Europe.
2014 European Business in China Business Confidence Survey