Robert Hargrove

An article by McKinsey & Company shows the biggest limit to growth in China won’t be lack of hard assets like capital, steel production or oil and gas, but leadership.

Many Chinese companies are growing fast, but suffering from leadership lag, which is the time between plotting a new growth strategy and the time it takes to find the leadership talent to execute it.

The fact is that, while some Chinese companies have the potential to double their size every 3 to 5 years, it takes much longer to develop leaders who can run such an enterprise, and therein lies the rub.

On my last trip to China in May where I spoke at CEIBS (China International Business School) I observed that the people with CEO, President, Vice President after their name would, by comparison, seem very junior standing next to their counterparts in the USA, Europe, or Japan.

According to my friend, Bill Patterson, an executive at Conoco Phillips, it can take 15 years to develop a senior leader and manager who has the competence to take charge of a major business unit with profit and loss responsibility.

That's the best of the bad news for China in this case. The McKinsey article pointed out that less than 15 percent of China's college graduates in business, engineering, or law schools would have the skills to land a job in a multinational company.

My point is that for China to continue to grow and develop at its present 15% clip, it must put leadership development and talent development at the top of its political and economic agenda.