Article

Talent Accelerator: South Asian Journal of Human

Resources Management
Understanding How 1(1) 123
2014 SAGE Publications India
Talent Delivers Private Limited
SAGE Publications
Performance Los Angeles, London,
New Delhi, Singapore,
for Asian Firms Washington DC
DOI: 10.1177/2322093714526666
http://hrm.sagepub.com

Dave Ulrich
Justin Allen

Abstract
Throughout the last 15 years of economic roller coaster rides, Asian countries
have clearly led the world in economic growth. Success in Asia has been due,
in part, to the transformation many Asian economies have engineered, moving
beyond manufacturing to successfully exporting technology and services. Now
another revolution is afoot. The best performing Asian businesses are gaining
impressive premiums in value creation because they have learned and imple-
mented the secrets of leveraging their companys most essential resource: talent.
To better understand this talent trend and how investment in talent ties to busi-
ness results in top Asian companies, we gathered data from over 570 separate
businesses in Singapore, China and India about 13 talent management processes.
We, then, show the relative impact of these 13 talent management practices on
business performance as moderated by the strategy and growth patterns of the
firm. We found that investments in managing current talent have more impact
on business performance than hiring new talent or retaining existing talent. We
report variances in the impact of talent management depending on country,
strategy and growth pattern. We discuss implications for talent management
for line managers and HR professionals. Ultimately, this work will inform those
charged with managing talent so that they can accelerate the use of talent to
deliver business results.

Keywords
Talent, results, strategy, Asia, leadership, promotions

Dave Ulrich, Rensis Likert Professor, Ross School of Business, University of Michigan;
Partner, The RBL Group. E-mail: dou@umich.edu
Justin Allen, Principal, The RBL Group. E-mail: jallen@rbl.net
2 Dave Ulrich and Justin Allen

Introduction
We know it matters. Some go to war for it. Professional sports teams draft for it.
Actors and musicians audition to show they have it. Others consider it the ultimate
solution and try to manage it. Agents contract for it. Some are innately endowed
with it while others strive diligently to earn it. All try to grow it. Talent. It is evolv-
ing into a science for some HR professionals and a passion for many line manag-
ers. A multitude of programmes and investments have been made to attract, retain
and upgrade talent. In this article, we provide leaders, HR professionals, consult-
ants and scholars a way to accelerate the deployment of talent, particularly in
Asian enterprises (Dowling & Donnelly, 2013; Rowley & Ulrich, 2013).
We begin with an overview of the importance of talent for Asian firms; we then
define talent as a set of 13 processes; we review our research methodology to
study the impact of these talent processes with 570 businesses in China, India and
Singapore; we report our results of how talent affects business performance, con-
sidering the strategy and growth patterns of the firm; and we discuss implications
for talent management for line managers and HR professionals. We want to help
those charged with increasing talent to have the insights and tools to accelerate the
use of talent to deliver business results.

Importance of Talent in Asian Organizations

Fifteen years ago, many of the best Asian leaders focused their strategic planning
sessions on how their Asian companies or business units could successfully make
the shift from exporting low-cost manufactured goods to exporting high-value
financial and technical services. Perceptive executives discussed business oppor-
tunities and their intention to change their respective industries. As we interacted
with these forethinking leaders, we were impressed with their vision, drive and
strategic focus to operate in such a dynamic and ever-changing environment. It
was clear that Asia was on the move. Consequently, their strategic plans are now
a reality, and the made in [pick your favorite Asian country] label is no longer
restricted to manufactured goods.
Now, 15 years later, another revolution is afoot.
Many Asian countrieswho have moved beyond manufacturingare suc-
cessfully exporting service and productively leveraging their most essential
resource: talent (Brum & Kabst, 2013; Scullion, Collings & Caliguiri, 2010).
Throughout the last 15 years of economic roller coaster rides, Asian countries
have often been the first to emerge from economic recessions, clearly leading the
world in economic growth. China and India are the target markets for both con-
sumer goods and capital for global investment, while Singapore is Southeast
Asias financial and commercial hub. Other Asian markets are routinely listed
among the next emerging markets: Indonesia, Malaysia, Philippines, Thailand
and Vietnam.

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

How Talent Delivers Performance for Asian Firms 3

Despite naysayers who argue that fast-paced growth in Asia will soon fall apart
due to over-reliance on foreign consumer markets and opaque banking, look east
remains a common refrain for businesses and investors looking for economic
growth opportunities and capital to fund their growth. Indeed, notwithstanding the
current credit crunch that seems to be mounting, independent economic forecast-
ers1 still project Chinese growth at 7.5 per cent and Indian growth at 5 per cent in
2013 through 2015.
Continued economic growth cannot be sustained without a concurrent renewal
of talent. While Asia is accepted and known for leading the way in economic
recovery, we suggest that Asia can also be at the forefront of talent renewal, which
will sustain business growth now and in the future.
Becoming a world-class producer of talent will require delicate management
of the philosophical and pragmatic differences in how talent is managed between
the East and the West.
Table 1 outlines nine key paradoxes Asian leaders may face when they attempt
to combine both Eastern and Western philosophies (in the dimensions of organi-
zation, employee treatment, success, governance, hierarchy, time, relations, talent
and referent).

Table 1. Asian Tradition, Opportunity and Paradox Must Be Considered in Talent

Management2

Dimension Tradition Opportunity Paradox

1 Organization Family- or Privately owned Managing multiple types of
state-owned enterprise or organizations at the same time
enterprise multinational
company
2 Employee Family centric Professionally Managing people with care and
treatment managed competitiveness
3 Success Growth Cost Managing renewable growth as a
combination of cost and growth
4 Governance Political masters/ Simple and Managing by objectives and
bureaucracy accountable mindset
5 Hierarchy Monopoly Market Managing the
(centralized) balance of monopoly (inside)
and market (outside)
6 Time Long-term Short-term Managing both long- and short-
term
7 Relations Grace/ Results/ Managing tough love
courtesy courage
8 Talent Attract Motivate Managing the entire talent flow
9 Referent Local Global Managing local,
country regional and global

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

4 Dave Ulrich and Justin Allen

These paradoxes are difficult to manage, but one key holds true: without the
right talent, organizations promises are unfulfilled, business growth is short-term,
and societys hopes for improvement of the human condition remain merely opti-
mistic ambitions. Ultimately, as they seek to cross boundaries and drive global
growth, Asian leaders need tools and practices necessary to successfully manage
talent (Ulrich, 2010).
Talent is not an abstraction. By designing, executing and reviewing talent man-
agement plans, top companies realize the tangible and intangible value from
investing in their people by obtaining better financial results, developing an
engaged and adaptable workforce and increasing customer and investor confi-
dence, particularly in emerging markets (Tarique & Schuler, 2010; Ulrich &
Sutton, 2011).
Executives and HR professionals who are willing to invest at least half a day
every quarter reviewing and making specific talent choices bring the rhetoric
about talent to fruition. However, too often battle-seasoned executive teams with
good intentions dedicate half of a day to the improvement of talent in their organi-
zation but do not know where to start or what to focus on. There are so many
frameworks, tools, platitudes, programmes and promises in the talent domain that
it is easy to get lost in the rhetoric.
Consequently, the half day on talent becomes a rather nebulous reaffirmation
that leaders must invest in talent, and executives leave the meeting with a talent
checklist, but without making concrete progress on improving talent. In response
to this dilemma, the results of the research highlighted in this article provide
clarity amidst the conceptual clutter that often swirls around talent rhetoric.

Definition of Talent as 13 Core Processes

Typologies exist to define HR practices (Tsui & Milkovich, 1987; Ulrich &
Brockbank, 2005). Others have studied knowledge of HR practices in Chinese
firms (Zhu, Cooper, Fan & de Cieri, 2013). We want to complement this work by
studying the investment in HR practices and how they drive business performance.
Talent choices within an organization may be seen as a flow. From a systems per-
spective, talent flows into the organization (sourcing, staffing, securing), through
the organization (motivating, developing) and out of the organization (retention,
removal).
We can specify choices leaders might take to better manage the flow of talent
into, through and out of the organization. When they do so, talent becomes Asias
critical (yet often hidden) resource; this means that talent becomes the critical
factor for sustained business success (Schuler, Jackson & Tarique, 2011).
This also tees talent up as Asias next export; this means that Asia should be
the area where innovative talent ideas and practices exist. The into, through and
out of the talent flow, with 13 accompanying talent domains, is defined as
follows:

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

How Talent Delivers Performance for Asian Firms 5

Talent Flow into Organizations

Five practices characterize talent flow into an organization:

1. Standards: First, leaders must set standards that clearly delineate the
behaviours top talent must employ, experiences they must accumulate and
results they must ensure.
2. Sourcing: Next, leaders must leverage current employees, alumni, technology
and other sources to identify talent who will fit well in the organization.
3. Screening: Then, leaders must evaluate talent to identify the top prospects
given the organizations business needs.
4. Securing: Once candidates are screened and desired candidates are
identified, leaders must have a compelling employee value proposition such
that the best talent will accept positions they are offered.
5. Steering: Finally, once talent is in the door, companies must guide new
talent to help them understand the company strategy and their specific role
in implementing that strategy.

Talent Flow through Organizations

There are six key areas of focus as talent flows through the organization:

1. Motivating: Motivation is often associated with rewards like compensation

and benefits, yet it encompasses much more. Top talent must feel that their
work is challenging and exciting. They must feel that they have a purpose at
work. They must feel assured that rewards are based on results rather than
some indefinable criteria based on politics or whim.
2. Assessing: High performers want to be measured and are encouraged when
they know management clearly differentiates between high performers and
low performers. They want direct feedback, and they expect assessment
standards to stay aligned with the business strategy.
3. Developing: Successful business leaders know that they must develop their
people. The best companies know that fast-track development comes in the
form of customized development assignments that are supplemented with
short-term training programmes and coaching. Too often, many companies
fail to customize and fail to develop talent as quickly as they need to because
they focus too much on training programmes.
4. Managing individual growth and promotions: Building a talent pipeline is
one of the most important yet most neglected of the talent domains. The best
organizations take special care to clearly identify successors and are able to
promote from within.
5. Communicating: Ensuring a consistent and clear message across the
organization is critical to talent coordination within the organization.

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

6 Dave Ulrich and Justin Allen

Additionally, the use of innovative technology platforms is becoming more

pervasive, and the best organizations are quick to adapt and adopt in a
manner that creates advantage for them.
6. Identifying and grooming leaders: The best organizations know that
leadership is the key to driving business performance through talent. A clear
business case must be established, and leaders must be developed in-line
with customer expectations. Ultimately, companies (both large and small)
reap significant benefits (both tangible and intangible) when they have a
strong reputation for leadership.

Talent Flow out of Organizations

Two areas make up the flow out of organizations:

1. Retaining: All organizations are going to experience the departure of good

employees. However, the best organizations pay close attention to why
people leave and actively work to engage their employees and retain top
performers.
2. Removing poor performers: Removing underperformers is perhaps the
most difficult of all talent practices. Yet if not removed, poor performers
can undermine and dilute other investments in talent, creating a culture of
resentment and skepticism among the top performers.

Talent management is about how to bring talent into the organization, how to
manage the flow through the organization and how to ensure the best talent stays
while those who do not fit are removed. By understanding and managing these
13 talent processes, thoughtful and innovative Asian executives and HR leaders
will help their organizations and their region make progress. For each of these
13 processes, we crafted specific questions that would indicate the extent to which
the organization performed on this practice as compared to competitors. Examples
of these questions are in Appendix 1.

Research Design on Talent Processes

In our 2009 research on Asian talent (Ulrich & Ulrich, 2010), we asked the ques-
tion: To what extent does managing talent affect business performance? The result
yielded a correlation of 0.57, which is a very high correlation between overall
business performance and overall quality of talent management. We must empha-
size that correlation does not connote causation. That said, the correlation sug-
gests that management of talent is a critical component for any leader looking to
improve his or her business in Asia.

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

How Talent Delivers Performance for Asian Firms 7

Our 2009 research provides a clear mandate: regardless of which way the data
are cut, talent matters. Talent must be a critical area of focus and investment,
especially as Asian leaders aim to move up the value chain. This current research
focuses on where leaders should focus their investments in talent among the
13 processes and how they should make those investments.
Given the scope of work, we followed a standard survey methodology approach
while simultaneously pursuing complimentary qualitative inquiry by means of
interviews. We began by framing the study based on (i) our extensive research and
experience in the fields of global talent management, human resources and leader-
ship development and (ii) our joint understanding of the particular set of talent
dilemmas and opportunities faced by Asian leaders today.
Once framed, we began to build the questionnaire while simultaneously com-
piling a lengthy target list for our sample. As stated above, the intent of the study
was to uncover insights into talent practices employed by all sizes of organiza-
tions in Singapore, China and India. Consequently, given that our aim was to
provide practical solutions for Asian business leaders, our goal in securing the
sample was to reach a large number of small- and medium-sized enterprises that
are not listed publicly. In view of the natural limitations of publicly available
information for practicality reasons, we pursued a non-probability sampling
model, with target companies selected based on proxies such as publicly availa-
ble, recognized lists that have an established selection methodology (based on
financial and growth indicators). The information in Table 2 indicates the source
for each country and company type.
In effect, our combination of judgement and quota sampling matches method-
ology commonly used in effective market research, but ours was on a much
grander scale, with well over 1,500 potential targets in order to achieve the desired
number of data points. That said, given that lists may be ranked according to a
certain metric or even alphabetically, we provided randomness through selecting
every six companies on the combined lists.
With the sample compilation underway, we constructed a skeleton question-
naire that was used as the baseline for both the survey and the interviews. This
questionnaire included a large number of questions that have previously been
used in global human resources and talent research, as well as several unique
questions written specifically to explore the Asian context. We then vetted the
questionnaire with a variety of inputs and finalized the online survey and inter-
view protocol. With our tools in place, we began the exhaustive data collection
process, which spanned four months during the first half of 2013 and resulted in
570 data points from Singapore, China and India (see Table 3).
These respondents belong to 570 separate business units in three distinct geo-
graphic regions. As indicated in Table 4, roughly half of our respondents were
business leaders and the other half HR professionals.
For our qualitative research, we also ensured that approximately half of the
respondents we interviewed in the three regions (Singapore, China and India)

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

8 Dave Ulrich and Justin Allen

Table 2. Sample Source for Companies from Each Country

Types of
Company Singapore China India
Domestic SME 1000 2012 Forbes Asia Inc. India 500: Indias
Listed SME 200 Fastest-growing,
Mid-sized Companies

Regional Fastest growing 50, 2011 Deloitte

Singapore International Technology Fast
100, SME Growth 50 China Forbes
Recognition for Non-listed Fast
Internationalizing SMEs Growing
2010, SME Growth
Recognition for Most
Promising Enterprises
2010
International Global Fortune 500, 2013 Forbes Top 100 The Economic Times
Fortune 1000 China Most Promising (ET) 500 ListIndias
Non-listed Companies Top Companies 2012
2013 Forbes Top 100
China Most Promising
Listed Companies
Note: Criteria description: Company is registered and listed on an established, recognized and
credible source. The companies selected cuts across the various industries. Mainstream and
popular online job search website for the country.

Table 3. Sample Size by Country

Singapore China India Total

Surveys 178 150 150 478
Interviews 32 30 30 92

Table 4. Sample Size by Respondents and Time in Position

12 years 35 years 510 years 10+ years Total

(%) (%) (%) (%) (%)
Business leader 18 12 5 11 46
(CEO, executive,
director, etc.)
HR (HR head, HR 22 15 12 6 54
director)

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

How Talent Delivers Performance for Asian Firms 9

were divided among business leaders and HR professionals. The interviews

embellished the surveys. Those interviewed were asked to give examples of
how the talent practices had unique influence on business results. We found no
statistically significant difference between the interview and electronic
responses and the stories may be found in the book on this research (Allen &
Ulrich, 2013). Additionally, roughly two thirds of our respondents had been
with their companies for five years or less. Although easily overlooked, this
important datapoint highlights the constant talent churn that most Asian organi-
zations face.
Top performers are rarely inclined to stay with a single organization for more
than five years and are often looking for the next big opportunity at a different
firm within two to three years of employment. Whether this fact is seen as a prob-
lem that needs to be fixed, or a new reality that needs to be managed, constant
turnover plays a critical role in talent priorities and is an issue that will be dis-
cussed in greater detail further in this book.
Next, in an attempt to examine linkage between an organizations talent prac-
tices and business performance, we devised a key dependent variable clustering
items related to the performance of the business. This is a complicated and diffi-
cult relationship to measure. In general, we were not able to use publicly reported
corporate data because due to the nature of our study, the majority of our respond-
ents are small and medium-sized businesses that are privately held. Furthermore,
even when gathering data from publicly traded companies, we were generally not
able to utilize publicly reported corporate data because we were examining results
at the business unit level (e.g., Google in Singapore).3 Therefore, we opted in this
research to use multiple measures of business performance, anchored by the fol-
lowing seven perceptions:

Profitability (objective data equivalent: earnings before interest, taxes,

depreciation and amortization [EBITDA]).
Labour productivity (objective data equivalent: sales per employee).
Development of new products and services.
Customer satisfaction (e.g., loyalty scores, net promoter score, etc.).
Attraction of required employees (key success indicator for talent-focused
companies).
Gross margin (assume higher margin is higher performanceindustry
expectations vary).
Brand recognition (visibility in the market).

For each of these areas, we asked participants to rate their businesses on a five-
point scale, from low (1) to high (5). While individual responses are subjective,
given that we had 478 survey respondents each from a separate business, we
believe that this multidimensional approach offers a reasonable (if perceptual)
indicator of business performance. Figure 1 shows a fairly normal distribution of

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

10 Dave Ulrich and Justin Allen

160

140

120
# of Respondents

100

80

60

40

20

0
1 2 3 4 5
Business Performance

Figure 1. Distribution of Business Performance

perceived business performance using the multidimensional methodology. While

respondents obviously tend to rate themselves above the midpoint on the scale,
the relatively wide distribution indicates sufficient differentiation.
We also wanted to discover if the 13 talent processes varied by a series of
organization factors. For each talent domain and its related behavioural items, we
calculated the average or mean score.4 The mean scores show how effectively
business units exhibit the talent domains and factors. We looked for differences in
these average scores in a number of areas:

Strategic focus: Do we see different patterns based on an organizations

strategic focus?
Geographic focus: Are there unique patterns depending on whether an
organization is domestic, regional or multinational?
Size: Do different patterns emerge based on the size of the company?
Growth: How do organizations vary in talent by their growth pattern?
Business leaders versus HR professionals: Do HR professionals demon-
strate a collective blind spot, seeing the organization as more (or less)
competent than their colleagues perceive them to be?
Country: Are talent strengths and weaknesses consistent across the three
countries of our study: Singapore, India and China?
Industry: Is the pattern of relative strengths and weaknesses different for
HR professionals?

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

How Talent Delivers Performance for Asian Firms 11

Our methodology allows us to determine the differential impact of the 13 talent

processes on business performance and to see if these relationships vary by con-
text of the business.

Overall Outcome: Investment in Talent

and Business Performance
Table 5 shows the relative impact of the 13 talent processes as determined by busi-
ness leaders and HR professionals. In this table (and in other results), we did a
regression of the 13 talent processes on business performance then we rescored
the beta weights into a 100-point scale to make the interpretation easier. All
13 talent processes matter in predicting business performance, but identifying and
grooming leaders stands out as the variable that explains the most variance. The
top four domainsdevelop, manage promotions, communicate and identify and
groom leaderscombine to deliver almost 50 per cent of the total impact. In other
words, if business and HR leaders in Asia can only focus on a few areas, they
should seek to improve in those four areas. Also, notice the inverse value business
leaders and HR professionals place on retaining and removing. Business leaders
see higher value on removing poor performers while HR professionals see higher
value on retaining employees. Both domains impact business performance, but
HR professionals in Asia would do well to acknowledge that business leaders feel
more pain and see more value created in removing poor performance.

Table 5. Relative Weighting of Talent Domain against Performance

Business Leaders HR Professionals

Standards to guide hiring 5.5% 5.3%
Source and identify talent 3.2% 4.7%
Screen and evaluate talent 4.3% 5.8%
Secure and hire the right employees 5.8% 3.7%
Steer and orient new employees 5.4% 4.1%
Motivate employees 8.5% 8.5%
Assess employees 8.0% 9.6%
Develop employees 9.8% 11.3%
Manage promotions 11.3% 10.6%
Communicate with our employees 10.9% 10.7%
Identify and groom leaders 12.8% 11.2%
Retain our employees 6.9% 9.3%
Remove poor performers 7.7% 5.0%
Multiple R2
0.54 0.60

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

12 Dave Ulrich and Justin Allen

Table 6. Relative Weighting of Talent Impact by Country

Singapore China India

Standards to guide hiring 7.9% 6.4% 1.8%
Source and identify talent 4.9% 5.1% 2.5%
Screen and evaluate talent 2.3% 8.9% 2.0%
Secure and hire the right employees 3.0% 3.4% 5.5%
Steer and orient new employees 8.4% 4.7% 3.6%
Motivate employees 11.7% 8.1% 5.8%
Assess employees 7.5% 8.4% 8.6%
Develop employees 11.8% 9.5% 12.7%
Manage promotions 14.0% 9.9% 10.9%
Communicate with our employees 5.2% 10.4% 14.8%
Identify and groom leaders 10.2% 10.8% 14.4%
Retain our employees 7.1% 8.1% 11.0%
Remove poor performers 6.0% 6.3% 6.7%
Multiple R2 0.39 0.69 0.45

Table 6 shows the impact of the 13 talent processes depending on the country
or origin. This goes beyond studies of HR within a particular country, like India
(Budhwar & Khatri, 2001; Singh, 2003) to comparing results across countries.
The fascinating finding from these data is that talent has an extraordinarily signifi-
cant impact on business performance in China (R2 = 0.69). That is, 69 per cent of
business performance in China as defined in this study is explained by these com-
bined talent variables. Ultimately, anyone entering the Chinese markets must be
stellar at implementing these talent domains if they hope to be successful in busi-
ness. The R2 in Singapore and India are still very high (0.39 and 0.45 respec-
tively), corroborating with the findings in our 2009 study as outlined earlier.
Ultimately, talent is imperative for business to succeed in Asia.
In more detail, Table 6 shows that the top 5 talent processes that drive business
performance the most in China are leadership, communication, promotions,
development, screening and evaluating talent; in India the top 5 are communica-
tion, leadership, development, retention and promotion which overlap highly with
China. In China, the practices related to sourcing new employees matter more
than in India; while in India, the practices related to managing current employees
matter more to business results. Evidently China (and Singapore) leaders need to
pay more attention to bringing in new talent as contrasted with leaders in India
who need to pay somewhat more attention to existing employees.
Perhaps the most instructive finding comes when comparing the results as
depicted in Figure 2. In this figure, we show the overall impact of the 13 talent pro-
cesses based on the regression scores (horizontal axis) and the relative effectiveness

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

How Talent Delivers Performance for Asian Firms 13

4.20

4.10
Steer and orient new
employees, 5.3%, 4.07
4.00
Standards to guide
hiring, 6.3%, 3.98 Motivate employees, 8.7%, 3.94
Secure hire the right
3.90 employees, 4.3%, 3.91
Assess employees, 8.7%, 3.83
3.80
Manage promotions,
Retaining our employees, 10.6%, 3.77
3.70 l
Screen/Evaluate talent to 8.6%, 3.78
determine if candidates d grooming
Identify and
meet standard, 5.2%, 3.74 leaders, 11.3%, 3.70
3.60
Communicating with our
employees, 10.0%, 3.59
3.50 Develop employees,
Remove poor performers,
Source and identify 10.5%, 3.53
5.9%, 3.47
talent, 4.7%, 3.46
3.40
3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0%

Figure 2. Summary of Talent Effectiveness by Business Impact of HR Practice Data Point

Labels are as Follows: Talent Domain, % Impact on Performance, Effectiveness on a Scale
from 1 to 5

of the 13 processes based on the mean scores for each process. Asian leaders are
more proficient at the first domains (standards, screen, steer, motivate) and generally
less proficient in the middle domains that have the most impact on business perfor-
mance. In fact, there is a significant focus gap. It appears that Asian leaders who
spend time on talent have ostensibly failed to become adept at areas that matter most.
For example, although leadership clearly has the highest impact on business perfor-
mance (11.3 per cent overall), respondents indicated that Asian businesses are gener-
ally more proficient at eight other talent domains. On the other hand, steering talent
has much less impact on business performance relative to the other domains, yet it is
an area of high proficiency. This figure also points out where Asian leaders can focus
on talent to have the most improvement: developing others, leadership, promotions
and communication (bottom right in the grid). Each of these talent processes has high
business impact, but has not done as well as others. Clearly, this data suggest that
Asian business leaders need to re-evaluate their priorities in talent investment.

Specific Outcomes: Accelerating Talent

under Different Business Conditions
We wanted to find out if different business conditions required different talent
strategies. To do so, we looked at the impact of the 13 talent processes on business

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

14 Dave Ulrich and Justin Allen

Table 7. Adjusted R2 of Combined Variables against Business Performance

Organization Variables
Strategic Focus Growth Size Geographic Focus
Strategic focus 0.04 0.19 0.06 0.06
Growth 0.16 0.17 0.18
Size 0.02 0.03
Geographic focus 0.02

performance based on the organizations strategy, geographic focus, size and

growth. In an effort to streamline leaders talent investment decision-making and
prioritization process, we dedicated a key portion of our research to identify which
of these variables explain the most variance in performance, and thus provide a
template leaders can follow to quickly make decisions regarding talent in their
organizations. Leaders in each of these business conditions can then begin to
tailor their talent investments depending on the setting of the organization.
To determine which one or two of the four dimensions has the most impact on
business performance, and therefore, which area leaders should focus on when
making choices, we ran regressions against performance for each variable indi-
vidually, and then used every combination of two of the above dimensions against
performance. As depicted in Table 7, growth alone explains 16 per cent of the
variance in business performance. In our combination analysis, the grouping of
strategic focus and growth had the highest explanatory power (adjusted R2). Given
the adjusted R2 of the combined variable (R2 = 0.19) we opted to explore strategic
focus and growth in further analysis.
Curiously, the cluster of geographic focus and growth also yielded a fairly high
adjusted R2, and an argument could be made for creating a parallel analysis of how
talent choices based on geographic focus. That said, given that the purpose of our
research is to provide clarity and actionable insights to business leaders and HR
professionals, we opted for the least complex approach directed by the data. With
that in mind, the following provides a more in-depth analysis of the two prime
dimensions: strategic focus and growth.

Talent Requirements by Strategy

Organizations succeed by strategically differentiating themselves. Most Asian
organizations are driven by growth by one of three strategies: customer centricity,
product innovation and cost. We defined customer centricity as organizations that
grow by gaining more share of existing customers. We defined product innovation
as organizations that grow by producing innovative products or services. We
defined cost-focused organizations as those which focus on being lowest cost or

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How Talent Delivers Performance for Asian Firms 15

Table 8. Strategic Focus of Sample Firms

Variable 1: Strategic Focus % of sample

Customer: Grow by gaining more share of existing customers and/or 42.4
attracting new customers
Product innovation: Grow by producing innovative products or services 29.5
Cost: Grow by lowest cost or being more efficient 28.1

more efficient. Respondents were given the opportunity to allocate weights for
each of the strategies given that some companies attempt to target multiple strate-
gies simultaneously. Our intent was to identify the strategy they emphasized most.
Businesses in our sample represent a fairly even distribution amongst the three
areas of focus (see Table 8).
As a reminder, we defined strategic focus as the general direction of growth a
company chooses: customer centricity, product innovation or cost. We then showed
the impact of the 13 talent processes on business performance by each of the stra-
tegic foci. As observed in Table 9, the overall impact of talent investments on
business performance is about the same regardless of business strategy, yet each
strategic area of focus has its own unique nuances. The first clear cross-emphasis
pattern is that talent domains related to bringing people into the organization

Table 9. Relative Weighting of Talent Practices on Business Performance by Strategic Focus

Customer Product Cost
Talent flow into Standards to guide hiring 6.5% 7.4% 5.7%
the organization Source and identify talent 5.6% 4.3% 3.9%
Screen and evaluate talent 4.7% 5.4% 5.0%
Secure and hire the right 5.0% 4.6% 2.7%
employees
Steer and orient new employees 6.2% 3.1% 4.2%
Talent flow Motivate employees 9.2% 8.1% 8.8%
through the Assess employees 9.0% 7.0% 8.9%
organization
Develop employees 10.3% 9.0% 11.1%
Manage promotions 10.2% 11.4% 12.3%
Communicate with our 9.2% 9.8% 9.3%
employees
Identify and groom leaders 11.0% 13.9% 10.2%
Talent flow out of Retain our employees 7.8% 10.4% 8.6%
the organization Remove poor performers 5.2% 5.6% 9.1%
Multiple R2 0.54 0.60 0.60

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16 Dave Ulrich and Justin Allen

(e.g., sourcing, screening, securing, steering) have significantly lower impact on

business performance than the domains related to what Asian companies do with
talent once they are moving through the organization (e.g., identifying and groom-
ing leaders, managing promotions, developing employees) (Cooke & Saini, 2010).
In regard to differences across the areas of focus, it is instructive to note that
cost-focused businesses must be much more focused on removing poor employ-
ees while less concerned at securing the right employees once they have been
identified and screened. This seems to reflect the difference in talent profiles
between cost-oriented businesses and customer- or product-oriented businesses.
In an efficient or cost-conscious strategy, wages are generally lower, and the
majority of the labour pool is often transactional in nature and anxious for the
opportunity to work. Consequently, it is critical to set the standards, and then
bring in people as quickly and cost-effectively as possiblewith a focus on filter-
ing out poor performers once they have had the opportunity to demonstrate their
level of fit.
On the flip side, customer-focused companies must pay much more attention
to aligning their employees with the customer-focused strategy as quickly as pos-
sible, and then ensure that employees are motivated and developed, being led by
a strong leadership team. In a customer-facing role, one poor performing employee
can create significant damage, so it is essential to ensure the right people, with the
right orientation, training and leadership, to ensure success.
In a product innovation business, strong leadership, clear communication and
a methodological process for moving people into the right positions are key.
Product businesses thrive on their ability to innovate and continually produce
products that delight consumers. As such, differentiation occurs among strong
leaders who set the direction and have both a vision of how future products will
play in the market, as well as an ability to execute the design, production and
delivery of those products.

Talent Requirements by Growth

Organizations may vary in talent by their growth pattern. We queried each
respondent regarding the extent to which their organization had experienced rev-
enue growth in the last two years relative to their industry, with selection options
including high growth, medium growth and little or no growth. Our sample repre-
sents a standard bell curve. As was expected, the majority of organizations posi-
tioned themselves as medium-growth organizations (see Table 10).
As outlined above, revenue growth in the last two years relative to industry has
the highest impact on performance. Interestingly, however, Table 11 suggests that
the talent domains in high-growth companies have roughly the same impact on
performance as the talent domains in low-growth companies, with the marked
exception of the removing poor performers domain. In a low-growth organiza-
tion, removing poor performers is absolutely essential to ensure high performance.

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How Talent Delivers Performance for Asian Firms 17

Table 10. Impact of Talent Practices on Business Performance by Growth

Growth
High: Above Low: Below
Industry Average Industry Average
Talent flow into the Standards to guide hiring 4.7% 4.9%
organization Source and identify talent 2.9% 3.7%
Screen and evaluate talent 7.4% 5.7%
Secure and hire the right 5.4% 2.7%
employees
Steer and orient new 5.3% 3.7%
employees
Talent flow through Motivate employees 9.8% 7.8%
the organization Assess employees 9.1% 5.1%
Develop employees 9.7% 11.3%
Manage promotions 12.4% 13.4%
Communicate with our 10.7% 11.4%
employees
Identify and groom leaders 11.5% 13.3%
Talent flow out of Retain our employees 8.2% 8.5%
the organization Remove poor performers 2.8% 8.6%
Multiple R 2
0.35 0.71

Although this finding is rather intuitive, qualitative data suggest that many organi-
zations find removing poor employees a difficult practice to carry out consist-
ently. We discuss the removal of poor performers in more detail further in this
report.
Comparing the means scores of average performing companies and top per-
forming companies within each growth level yields some interesting findings. In
particular, the spread between average and top companies is the widest in the
medium-growth realm. You may recall that the descriptive statistics above show
that the vast majority of companies in the study identified themselves in the
medium-growth category. Hence, for the majority of organizations, emphasizing
talent is a differentiator (particularly managing promotions, communicating, lead-
ership and talent retention). Meanwhile, there is very little differentiation between
domain means of average and top companies who are currently experiencing low
growth. Additionally, low-growth companies have overall lower mean scores than
medium- or high-growth organizations. Apparently, although Table 11 indicates
that talent is just as important in low-growth as in high-growth organizations,
managers in low-growth organizations fail to invest in talent. This may be a lead-
ing cause for stagnating growth.

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18 Dave Ulrich and Justin Allen

Table 11. Impact of Talent Practices on Business Performance by Growth

Growth
High: Above Low: Below
Industry Average Industry Average
Talent flow into Standards to guide hiring 0.05 0.05
the organization Source and identify talent 0.03 0.04
Screen and evaluate talent 0.07 0.06
Secure and hire the right 0.05 0.03
employees
Steer and orient new 0.05 0.04
employees
Talent flow Motivate employees 0.10 0.08
through the Assess employees 0.09 0.05
organization
Develop employees 0.10 0.11
Manage promotions 0.12 0.13
Communicate with our 0.11 0.11
employees
Identify and groom leaders 0.12 0.13
Talent flow out of Retain our employees 0.08 0.08
the organization Remove poor performers 0.03 0.09
Multiple R2 0.35 0.71

Implications
Our intent in this research is not just to declare that talent matters in Asian firms,
but to show specifically which talent processes have the most impact under spe-
cific business conditions. We confirmed the importance of talent. Investing in
talent has a major impact on business performance. We showed that some talent
processes (e.g., leadership, development, communication) have more impact than
others. We were able to empirically demonstrate that Asia leaders who invest in
talent development will increase their organizations performance. We identified
13 specific talent processes and we found that these processes varied in predicting
performance based on an organizations strategy and growth aspirations. We rec-
ognize the limitations of this research: It focused on small and medium enter-
prises (SMEs) more than large enterprises; it is still a relatively small sample; it
is a self-report data which may have multi-collinearity affects. However, we
believe that these findings have significant impact on general managers and HR
professionals.

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How Talent Delivers Performance for Asian Firms 19

General Managers
The research and analysis we report is targeted to line managers in Singapore,
China and India, who increasingly believe that talent is key to their business suc-
cess. They increasingly need thought leadership, insightful recommendations and
practical processes to help them effectively manage talent and talent-related
issues. When they understand the practices of talent management and the data
backing up the practices, they will be more confident that investing in talent will
help them reach their goals.
Based on this research and our experience working with line managers, we
would make the following recommendations. First, line managers become the
owners of talent. Talent decisions can and should not be delegated to HR profes-
sionals. Since talent has such a critical impact on business performance, line manag-
ers should be primarily responsible for making investments. Second, line managers
should spend personal time on talent issues. In our research on top companies for
leaders, we found that the best companies for building leadership have line manag-
ers who spend 2025 per cent of their time building future leaders. We would coach
Asian leaders to spend such significant time. Third, given our findings, we encour-
age Asian leaders to spend less time on bringing new people into the organization
and more time working with existing employees. Leaders who work to build future
leaders, to develop others, to communicate clear messages and to encourage promo-
tion or succession will be spending time on the right talent processes. Finally, we
recommend that talent management becomes part of a leaders scorecard. In addi-
tion to delivering financial, customer and organization results, we believe that lead-
ers should be accountable for talent. Talent indicators might include attraction and
retention of key people, employee engagement or motivation, employee productiv-
ity or employee development. Line managers are owners of talent work.

HR Professionals
The ideas and findings of this research should help HR professionals in Asia
(Farndale, Scullion & Sparrow, 2010). Senior HR executives face increased
accountability to make sure that HR practices and functions align to and drive
business results. While line managers should be accountable for talent initiatives,
HR professionals should be their partners or architects who facilitate, coach,
design and deliver talent initiatives. To fulfil their HR architect role, HR profes-
sionals need to set direction for talent management, make sure it happens, engage
people in the process and make sure it endures. HR professionals should know the
latest research and be able to translate that research into specific actions within
their organization (Budhwar & Debrah, 2009).
We have argued that HR should deliver talent, leadership and culture (Ulrich,
2013a, 2013b). In this research, we have focused which talent practices may have

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20 Dave Ulrich and Justin Allen

the most impact on business performance. While the war for talent (Beechler &
Woodward, 2009; Michaels, Handfield-Jones & Axelrod, 2001) has been under-
way for 15 years, it is important to go beyond the general rhetoric to identify
specific talent practices that will improve business performance. In this work, we
found a focus on existing employees is more important than on sourcing new
employees or on removing employees. In particular, we found that leadership,
development, promotion and communication practices had the most impact on
business performance. HR professionals who want to deliver talent should pay
more attention to these practices.
The bar for HR has been raised. HR professionals who continually worry about
having access to business leaders never will gain access. In contrast, HR profes-
sionals who understand the power of effectively leveraging talent as presented
herein will be able to contribute and much more successful in their personal careers.

Organization Scholars
This study fills a significant void by providing practitioner-oriented qualitative and
quantitative data on talent management in Asia. Going forward, more work is
needed to explore the key findings of this report. Academics, consultants and prac-
titioners alike would benefit from a replication of this study, but with a broader
geographic scope and with a much larger sample size. Additionally, it would be
helpful to identify how managers practically implement the talent practices identi-
fied in this research. There is also much to be done to gather data about the talent
domains from the perspective of critical stakeholders (investors, customers, suppli-
ers, government, etc.). That said, we believe that the most important activity that
must flow from this research is the development of simple, accessible tools and
action lists which Asian managers can use on a daily basis to better manage talent.

Conclusion
The way talent is brought into the organization, managed while in the organiza-
tion, and either retained or moved out of the organization clearly affects the per-
formance of the business. The descriptive and predictive statistics about talent in
Asia and business performance tell a story about baseline practices essential for
business leaders and HR professionals. We hope that this type of research begins
to create insights that make Asia not just a manufacturing hub, but also a reposi-
tory for innovative talent management practices.

Acknowledgements
We appreciate the support of the Singapore Ministry of Manpower and our colleagues at
PWC Singapore for sponsoring and collaborating on this research.

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How Talent Delivers Performance for Asian Firms 21

Appendix 1. Illustrative Questions for Each Talent Process

Talent process
Standards to guide hiring
Source and identify talent
Screen and evaluate talent
Secure and hire the right
employees
Steer and orient new
employees
Motivate employees
Assess employees
Develop employees
Manage promotions
Communicate with our
employees
Identify and groom leaders
Retain our employees
Remove poor performers
Illustrative Questions
(How does your organization compare to its main
competitors on each of the questions?)
Response options: very poorly (1) to very well (5)
Establish standards for new talent consistent with our
business strategy
Hire new employees based on employee referrals,
online sourcing, employment agencies, university
relationships, assessment centres
Involve line managers in screening candidates
Have a clear employee value proposition that is
attractive to new hires
Provide new employee orientation that helps them
understand their new job and the business strategy
Give employees a sense of purpose in their work
Design measurement systems that distinguish high-
performing individuals from low-performing individuals
Give employees development assignments that help
them grow (e.g., special projects, cross-functional
assignments, customer interactions, stretch roles, etc.)
Promote appropriate people (e.g., talent pipeline,
succession planning)
Work with managers to send and receive clear and
consistent messages
Define a leadership brand strongly aligned with the
corporate brand
Retain top performers (A players)
Terminate/remove low performers

Notes
1. The Conference Board, an independent economic forecasting organization, in Joshua
Kurlantzick, China Falling? Not So Fast, Bloomberg Businessweek (28 June 2013;
http://www.businessweek.com/articles/2013-06-28/china-falling-not-so-fast).
2. Some of the differences of East vs. West can be found in: http://www.1000ventures.
com/business_guide/crosscuttings/cultures_east-west-phylosophy.html
3. To provide an additional validity check, we selected a random handful of publicly trad-
ed organizations from among those who responded and compared their responses with
public information. Although they used local geographic figures when responding to
the number of employees and total revenue (therefore not comparable), comparable
information such as percent revenue growth and brand recognition was validated and

South Asian Journal of Human Resources Management, 1, 1 (2014): 123

22 Dave Ulrich and Justin Allen

matched, suggesting that survey participants were not overly inflating their responses
or inaccurately portraying their business results.
4. Because we have used a survey methodology for both the talent items and performance
items, there is a possibility of an elevated correlation known as the common method
variance problem. In other words, there is a possibility that correlation between two
measures may be due to the common measurement method (respondents who in-
flate their ratings on talent metrics may also inflate their ratings on the performance
metrics).

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