It’s the Asian century but leadership in Australia suggests otherwise. Only three percent of senior leaders in ASX 200 listed companies have Asian cultural origins despite circa nine percent of Australian workers having been born in Asia.
Asia is the single biggest growth opportunity for Australian business. By 2025, Asia will account for almost half of the world’s GDP and will be home to four of the largest global economies – China, India, Japan, and Indonesia. By 2030, two-thirds of the world’s middle class will be in Asia, up from one-third today, and by 2050, Asia will have twenty of the world’s top 50 cities ranked by GDP, up from eight in 2007. It’s estimated that over $275 billion will be injected into Australia’s economy by forging closer ties with our Asian neighbours.
Yet, despite a clear economic case for Asian Australian leadership, and while Australians of Asian descent comprise 12 percent of the country’s population and students of Asian origin dominate academic scales at selective high schools, only 4.2 percent of directors in Australian listed companies have an Asian cultural background.
It is not only at leadership that Asian Australian talent is undervalued. In entry-level studies, job applicants with Chinese names fare the worst, having only a one-in-five chance of getting asked in for interviews, compared to applicants with Anglo-Saxon names whose chances exceed one-in-three. Typically a Chinese-named applicant would need to put in 68 per cent more applications than an Anglo-named applicant to get the same number of calls back.
Why does corporate Australia undervalue and overlook Asian talent in recruitment, development and promotion?
This clip from The Big Short offers a clue. (In a hurry? Watch from 1.30 to 2.33.)
When individuals interact with one another, we make rapid judgments based on deeply embedded stereotypes. Stereotypes refer to beliefs that certain attributes, characteristics and behaviours are typical of members of a particular group of people. Stereotypes assign a whole suite of characteristics, positive and negative, to anyone categorised as being from that group. Stereotypes involve societal and cultural groups like Chinese, African-American, homosexual. We also hold stereotypes for roles, for example, leader, lawyer, engineer. Role stereotypes are often linked to group membership. The predominant stereotype for leader is middle-aged white male. The predominant stereotype for nurse is female. At work, discrimination manifests when there is a mismatch in role and group stereotype. Role discrimination is often automatic and unconscious.
In 2010, researchers tested how cultural stereotypes interact with role stereotypes to influence assessments of competence. In a controlled experiment, they randomly distributed two employee descriptions to participants:
‘John Davis, a 31-year-old Caucasian American male, graduated in 1994 from University of Arizona as a Engineering major. He has been employed in the same U.S.-based organization for five years as an Engineer Project Manager. His responsibilities include managing customer complaints, providing consultation regarding the company’s services, and troubleshooting customer problems. While he sometimes has problems with certain co-workers, he is generally good tempered.’
‘Wong Tung-Sheng, a 31-year-old Asian American male, graduated in 1994 from University of Arizona as a Engineering major. He has been employed in the same U.S.-based organization for five years as an Engineer Project Manager. His responsibilities include managing customer complaints, providing consultation regarding the company’s services, and troubleshooting customer problems. While he sometimes has problems with certain co-workers, he is generally good tempered.’
The only differences between employee A & B were name and race.
Researchers then asked participants to rate on a scale their responses to the following questions:
How is technically competent this individual?
What is the leadership potential of this individual?
The results were alarming. Despite no expressed difference in role, experience, education or interpersonal skills, the Asian American candidate was ranked at a higher level of technical competency than the Caucasian American. Further, despite being rated at a higher level of technical competency, the Asian American candidate was rated at a lower level of leadership potential than the Caucasian American
The researchers had demonstrated that cultural stereotypes interact with role stereotypes to influence assessments of competence. The Asian cultural stereotype of technical superiority interacted with the role stereotype of Engineer to positively influence assessments of technical competence. On the flip-side, Asian cultural stereotypes of modesty, indirect communication, and avoidance of conflict negatively interacted with leader stereotypes.
Consider the following anecdote that an Asian Australian friend of mine shared with me recently and kindly allowed me to share with you.
“So today, during a chat with a “recruiter”, it was indicated to me that my years of professional experience nationally and internationally won’t get me any closer to positions at the General Management level because I lacked “gravitas” to handle problems.”
Gravitas was one of the Roman virtues, along with pietas, dignitas and virtus, appreciated in leaders. It translates variously as weight, seriousness, dignity, and importance and connotes a certain substance or depth of personality. In a Center for Talent Innovation survey of senior leaders, 67 per cent of leaders reported gravitas as the most defining element of executive presence. Sylvia Ann Hewlett, author of Executive Presence: The Missing Link Between Merit and Success, based on survey responses from senior leaders, defines gravitas as six factors:
Confidence and “grace under fire”
Decisiveness and “showing teeth”
Integrity and “speaking truth to power”
Reputation and standing/”pedigree”
In Western markets, desired leadership traits include confidence, assertiveness, and directness, attributes which are counter to Asian cultural stereotypes. Of note, concern for “face”, emphasis on modesty, and preference for an indirect communication style are seen as impeding outstanding leadership in Western markets, contributing to the ‘bamboo ceiling’ faced by individuals of Asian descent in achieving greater leadership representation in Western contexts.
Australia’s abundant natural resources have underpinned our economic prosperity. We are slower to realise the competitive advantage of our multicultural human capital. Cultural diversity is most likely to involve differences in perspectives, knowledge and experience necessary for optimal information-processing, risk-assessment, decision-making and innovation; and for understanding the needs and concerns of different consumer segments and diverse stakeholders—including shareholders, suppliers and regulators—at home and across borders. Companies in the top quartile for racial and ethnic diversity are 35 per cent more likely to have financial returns above their national industry median.
Corporate Australia—isn’t it time we invested in Asian talent? Alongside our natural resources, our diverse human capital is a critical competitive lever for capturing the Asian growth story.
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