“China: The Last 10 Miles,” an article in the October issue of Accenture’s webzine Outlook_,_ asserts that as Chinese companies will have to recognize the importance of talent as key differentiator to fully succeed as a long-term global competitor. In fact, the authors (Gong Li, Bo Wang, Kathy Yi Liu, and David Light) contend that “lack of key talent and high employee turnover are major problems for Chinese enterprises.”

The article goes on to explain how many organizations are experiencing “brain drain” because they lack clear performance management practices. “Promotions are often based on length of service, not job performance. Even in companies that have merit systems, an annual review is often a mere formality,” the authors write.

Chinese companies also tend to invest less in training than Western enterprises do, according to the article. There are some bright spots, however. Case in point: Port of Qingdao, which runs one of the world’s busiest ports (with assets of some 27 billion yuan ($4.2 billion), emphasizes training—from the lowest migrant worker to the very top of the company.

The authors’ research finds that the Port’s success “owes much to its commitment to talent development and to becoming a learning organization.” Port of Qingdao’s learning process begins with orientation training and continues through a worker’s entire career. In addition, other the Port offers other learning activities, such as

• on-the-job training targets at practical problems

• managers conduct technical Q&A sessions to address issues regarding production and machinery

• technical seminars and onsite equipment management exchanges to promote best practices developed by teams

• an annual skills contest to encourage employees to put their learning into action.

All executives must participate in intensive training and development camps that end with a rigorous examination, as well as join in on field surveys during the coldest and hottest days of the year as another form of learning.

Finally, at the Port of Qingdao, those who come up with new and better ways of working win a special kind of award: the new method carries their name. In fact, more than 290 employee brands representing some 1,500 unique skills have emerged.

Bottom line: In the early years of China’s economic boom, enterprises were characterized by low added value, low operational efficiency, and low productivity, but to rectify this imbalance, Chinese companies will have to focus on developing capabilities related to strategy, human resources, and culture.

Gong Li is the chairman of Accenture Greater China; he is based in Shanghai. Bo Wang is the Beijing-based managing director of management consulting for Accenture Greater China. Kathy Yi Liu is a Beijing-based senior manager at the Accenture Institute for High Performance. David Light, a senior research fellow at the Accenture Institute for High Performance, is the Institute’s editor-in-chief.