Over more than two decades in China, I have watched the pendulum swing repeatedly when it comes to leadership selection. In prosperous times, foreign companies champion corporate culture, diversity, and international leadership teams. When markets become more challenging, priorities often shift. Foreign managers are replaced by local leaders, and localisation becomes the dominant strategy.

In the past, this was not always because local managers were considered more capable. More often, they represented a cost-effective solution that aligned with tightening budgets. Today, the landscape has changed. Chinese managers are every bit as capable as their international counterparts, and they command compensation packages that reflect their value and experience.

What has been lost in many organisations during these cycles of changing leadership philosophies is something far more important: continuity. The common thread that once connected strategy, culture, and long-term vision has too often been weakened by frequent shifts in direction. As companies alternated between globalisation and localisation, many inadvertently diluted the very corporate identity they sought to preserve.

Now, as China regains momentum, we are seeing the pendulum swing once again. Foreign managers are returning, and requirements that only recently emphasised Chinese language proficiency are unfortunately gradually being relaxed.

The companies best positioned for success are not those chasing the latest trend in leadership, but those that remained committed to balance throughout. Organisations that maintained diverse leadership teams, with Chinese and international managers working side by side, are now benefiting from broader perspectives, stronger cultural alignment, deeper market understanding, and greater agility in responding to China’s rapid evolution.

The lesson is clear: consistency matters. Leadership strategies should be built for the long term, not adjusted with every economic cycle. It is never too late to reset and get it right. Preserve continuity. Invest in cultural diversity. Build leadership teams that reflect both global ambition and local insight.

Above all, don’t let the pendulum swing too often; it may eventually throw your organisation off balance.

By Lars-Åke Severin, CEO PSU