How to Build Operations in the Global Marketplace
15 February 2007 Jane Greenwald
CEOs are becoming ever-more aware of the need to recruit leaders capable of performing in the worldwide marketplace. Lisa Tromba and Jane Greenwald of Battalia Winston International explain how to strike the balance between local knowledge and global capability.
As emerging markets continue to flourish, significant dilemmas around talent acquisition and global leadership have taken a prominent position on the CEO's agenda.
Particular challenges exist across US-based multi-national manufacturing companies including the need to reconfigure resources, redesign product development processes, re-evaluate cost structures and perhaps, most important of all, the need to reconsider the profile of top-level executives to lead the strategic and tactical development of emerging markets.
A DELICATE BALANCE
Increasingly, global corporations are focusing on striking the right balance between 'boots on the ground' which can leverage local advantages, and well-experienced global leaders who can successfully integrate core business goals and company principles with local market advantages, cultures and business opportunities for business sustainability.
Challenges abound both at the local market level and at the multinational corporation (MNC) headquarter level with regard to recruiting, developing and retaining the required talent.
The over-riding challenge is identifying the right management talent with the ability to technically and autonomously manage the operation. These managers must have the potential to evolve professionally and the commitment to align with the corporate vision while leveraging local advantages to lead the growth of the business. Differences in values, behaviours, and communication styles complicate the quest further.
Finding qualified people to manage operations is challenging. A crucial aspect of determining the right fit is assessing a candidate's capacity to understand and comply with US environmental, labour, code of conduct and Sarbanes-Oxley regulations while still succeeding within local and accepted norms and business practices.
Furthermore, it is well recognised that there is a scarcity of top talent at the local level in most emerging markets. The competition from other MNCs is fierce and has made recruiting local talent in those markets even more difficult.
Consequently, companies are focused on developing leadership in the US that can manage operations abroad. More than ever, US operations executives are presented with skill-broadening assignments designed to help them grasp global operations. Part of that growth experience is developing local leadership and building local teams that can most effectively leverage cultural nuances and advantages.
MNCs must approach emerging markets with a strong focus and sense of urgency. Leveraging the expertise of seasoned and well developed US operations executives is the most effective means of getting markets up and running.
Additionally, lower labour and raw materials costs have forced much manufacturing offshore and to contract manufacturers, requiring increased management from the US to ensure quality and compliance. In every case, inappropriate leadership will diminish results.
Developing business and operations leaders in the US who can execute the corporate operations vision and strategy, best practices and working standards, provides the stability and foundation upon which local leadership and markets can grow and thrive.
Beyond the requisite technical skills, it is crucial that these executives fully understand and be able to tap into the knowledge contained in local markets. In addition, global leaders need to be able to influence and inspire even when it is not possible to offer a warm handshake or pat on the back in person. Passion, energy, authenticity and commitment are also at the top of the critical skills list.
Adaptability and flexibility are important as leaders must be able to respond to the rapidly changing priorities of the global market and business landscape. Strategic thinking skills aligned with the ability to deal with ambiguity and anticipate hurdles are defining qualities that will set top executives apart from the rest.
Global leaders must be sensitive to other cultures. From appropriate salutations to business deal decorum, cultural traditions vary. Leaders will be expected to understand and participate in the behavioural intricacies within the local markets that they manage. The best candidates will work to increase their knowledge of different customs, so that they are adaptable from market to market, thus enhancing their value to the company that they serve.
Creating consistency across markets is an ever-increasing challenge for multinational companies and global leaders. The foundation for consistency is through the perpetuation of the corporate values, best practices and operating disciplines. However, business models may need to be adjusted for each market in order to leverage cultural and local advantages.
Sourcing strategies for production materials and also distribution models are two of the areas that often require adjustment to better fit the local cultures. Cross-border assignments continue to be one of the most effective ways to create consistency across an enterprise.
Increasingly multinational corporations are instituting a variety of programs to develop global leaders and retain talent abroad. Many companies have created educational programs throughout their organisation to enhance the culture and calibre of talent. In some cases within large MNCs, leadership development programs at the local level are being modelled after successful US leadership programs.
In connection with a 'high-potential' leadership recruiting model for a multi-billion industrial, the program that Battalia Winston International has been engaged in for the past three years is now being adjusted for rollout in China, which will be followed by other developing business markets.
This will require a critical analysis of the Chinese culture and the program in order to capture and leverage the advantages, nuances and potential for leadership development in this thriving emerging market.
From supply chain management to manufacturing operations across business lines, programs are being designed to provide active learning opportunities with multi-functional dimensions to develop well-rounded management and leadership skills. Additionally, companies are investing in traditional avenues of education as well. In China, however, companies are struggling to hold on to people long enough to develop them.
MNCs are also placing greater emphasis on improving their approaches to identifying both internal and external high-potential talent and providing those identified as high potentials with appropriate challenges. This approach aligns 'stars' with opportunities to shine, promoting internal growth and appreciation.
The same incentives that provide job satisfaction in the US apply globally. Fair compensation, appreciation, communication of a vision and an opportunity to learn and grow apply to business environments worldwide. However, with the intense competition for top talent, competitive compensation and growth opportunities have become even more important in retaining key talent.
As a result of these challenges, more companies are looking for increased value from executive recruiters. Recruiters' roles with MNCs have evolved from a transactional focus to that of a valued strategic partner and advisor in talent acquisition, succession planning and leadership development.
The recruitment team will need to develop effective approaches to evaluating key leadership attributes and capacity, to make the best decisions in acquiring new leadership talent.
To meet the needs of the global market, the assessment skills of a US-based recruitment team must include the ability to identify leaders with global and virtual leadership skills, cross-cultural sensitivity, the energy and willingness to work across time zones and to travel when necessary.
Recruiters must be able to assess key qualities including integrity and non-negotiable values, sense of urgency, commitment to continuous learning, proper perspective on success and failure and a business perspective focused on investment returns.
Global leadership is demanding and requires the ability to translate the strategic vision for the firm globally into the talent needs and best practices on a local level. Technical skills are not enough to sustain global leadership. It is the harder-to-measure competencies in global talent which will ultimately propel the business strongly forward into the future.