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Is Ethnicity a Barrier to Growth in Asia?

As an international banker working in Hong Kong, Lim* is enlarging his firm’s business and expanding its presence in mainland China. Meeting his revenue goals depends on his ability to gain customers in markets awash with global financial giants and well-placed local players. Despite the fact that Lim’s employer is a relative latecomer to the market, Lim is doing well. The key to his success

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As an international banker working in Hong Kong, Lim* is enlarging his firm’s business and expanding its presence in mainland China. Meeting his revenue goals depends on his ability to gain customers in markets awash with global financial giants and well-placed local players. Despite the fact that Lim’s employer is a relative latecomer to the market, Lim is doing well. The key to his success? His Chinese Malaysian ancestry. “Malaysian Chinese are increasingly coming to China to invest,” he explains. “They speak the local languages so they can deal with any bank. But they want to do business with someone who understands them — and for whom their Mandarin, Cantonese, or Hokkien is not accented but normal. They want to work with someone who understands their holidays, their food, their jokes. They want another Malaysian Chinese.”

At one level, Lim’s story is not a problem. It seems a rational matching of external market needs to a professional’s individual strengths. Win-win. After all, it’s a smart move for a bank or any other business to ensure that the external customer or client is as comfortable as possible with the firm, and that certainly includes the sales people and relationship managers.

But take it a step further. Consider the consequences of this phenomenon to the organization’s internal workings and future success. How can a bank grow with so few Lims? And what if Lim isn’t really the best person for the job in other ways? For example, what if he is good in terms of creating relationships, but not all that good at structuring the deals? And how does the firm grow future leaders when only a select few get the best developmental opportunities and job experience based strictly on ethnicity? Not all leaders can come from just one or even a few select backgrounds. Innovation suffers, as does employee engagement: two key issues in Asia.

Another bank we are working with, also based in Hong Kong and hoping to boost innovation and employee engagement, is taking its first steps in changing its demographic profile. Their newly stated goal is to recruit, develop, and advance the strongest people they can find. They want to avoid sorting based on race and ethnicity and other demographic factors; they want to be a transparent meritocracy. Here are the questions that they need to consider:

Which roles require someone from a specific background? The challenge in Asia around ethnicity runs deep. The current reality is that certain outward facing roles — like Lim’s — probably need a very specific background today based on the maturity of the external market. Internal roles should not require the constraints currently imposed by the external market. Any internal function like IT, HR, R&D, engineering, office services and the like must be open to anyone with the skill and drive to succeed.

How can roles be migrated over time? Lim does not work alone. He has a team. He should familiarize clients with his team members from different backgrounds, and vise versa. Over time, comfort will grow and the firm will no longer need to keep Lim limited to this one, outward-facing role, allowing him to advance — while also advancing others.

What can the organization do to facilitate this change? Build trust. The core need that the client feels is not ethnicity, but trust. Being comfortable culturally is a key part of that. People can be trained to reach across cultural divides and reduce them by large degrees. This is true internally as well as externally.

The last point may sound naïve. But I have met many minorities in the halls of power, including women in the Middle East and tribal Africa, in both business and politics, who get their staunchest opponents — local men — to know them and trust them inch by inch, by focusing on shared interests and values. In the words of Christiane Amanpour in a recent HBR interview: “I’ve lived in a completely multi-cultural, multi-ethnic, multi-religious environment in some of the most difficult places in the world. I’ve seen first-hand that you can bridge differences. The trick is to minimize the extremes in any kind of relationship and to stick to the sensible center.”

Breaking the ethnic barrier would make an enormous difference to Asian firms’ abilities to grow the best talent — but are organizations willing to do what it takes to bridge these ethnic and cultural divides?

* Name has been changed.

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Is Ethnicity a Barrier to Growth in Asia?

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