Global, Local or Glocal

As we all know, corporations are not immune to occasional accounts of hype and exaggeration.  You are no doubt familiar with the inflated claims that some firms make about their products and services.  The FDA and other government agencies sometimes have to step in and dismiss firms’ claims about the supposed efficacy of their products.  Just recently, for example, the FDA has warned a genetic testing company, 23andMe (co-founded by the spouse of Google’s Sergey Brin), to stop sales of its genetic tests because the tests have not been clinically or analytically validated.

I have noticed that corporations in general make two additional questionable and sometimes exaggerated claims about their firms.  The first is that people are their most important assets, and the second is that they always operate ethically.  My point is not that these claims are always false, but that we should not be naive enough to accept these statements at face value.  What we have to do is look for the evidence, to ask ourselves what proof corporations have for making these statements.  At times, the rhetoric fails to catch up with reality.  Johnson & Johnson, as one example, is a firm that takes pride in its credo, a series of statements about its values.  I know many students and business colleagues who work for J&J, and who take these values very seriously.  Yet recently, J&J has been involved in a series of scandals that makes one question the extent to which these values are truly institutionalized. Professor Jeffrey Pfeffer raises similar concerns in his book “Hard Facts, Hard Truths and Total Nonsense:  Profiting from Evidence-Based Management.” 

The latest exaggerated claim that I have observed is with companies that say they are truly global.  After all, it is somewhat “in” to claim that you are a global company.  If in fact more than 50% of your sales are coming from outside of your home market, or if your strategy entails your opening up businesses in different markets around the world, it might make sense for companies to brand themselves as global.  Occasionally, these companies say that they “think global but act local.” 

Several years ago, Professors Bartlett and Ghoshal coined the term “transnational” to refer to a type of management strategy that tries to resolve and integrate the tensions that arise in global companies between responding to local pressures to customize (“localization”) and global pressures to standardize (“integration”). This is otherwise referred to as a “glocalization” strategy.

Let’s spell out a little more clearly what this means.  To be global, or transnational, is not just about having products and services sold outside of your home country.  Companies that simply export their products are not truly global.  Companies that have subsidiaries overseas in several countries, or where their overseas sales are approaching close to half their revenues, are not necessarily global companies. 

In my experience and observations of these companies, I propose a set of questions whose answers would indicate whether or not a company is truly global or transnational. 

1.     How culturally diverse are the executives in the C-suite?  Do they only come from the company’s home country, or are other countries represented?

2.     Do subsidiaries in the most important overseas markets have direct reporting relationships to the CEO or COO or do they tend to be buried in layers of reporting structures?

3.     Do executives in key subsidiaries have meaningful global roles (e.g., chairing a global task force) or is their role restricted to delivering profits for their country of responsibility?

4.     How frequently do headquarters executives meet with their subsidiary executives as a team?  Do they fly out to the regions for meetings or do they expect their subsidiary heads to come to home office all the time?

5.     How involved are subsidiary executives with key corporate initiatives?  Do they sit on important corporate councils?  And do headquarters executives seek their input on corporate initiatives before they are rolled out to their regions?

6.     Does the company have a global talent strategy which includes, among other things, the identification of high potentials globally and targeted development plans for these high potentials, no matter what their nationality or country of origin is?  Does its talent strategy also include rotation of individuals from country to country, and not just from headquarters to subsidiaries?

7.     When cross-functional teams are formed to tackle specific initiatives, to what extent are various subsidiaries represented?

8.     Does the company have global leadership programs that are offered worldwide, and to what extent does the curriculum include content on globalization, cross-cultural sensitivity and related subjects?

9.     Are there mechanisms and processes for sharing information and leveraging expertise across borders?  For example, if the company has centers of excellence, does it make sure that these centers have worldwide responsibility for sharing information?

10.  Is global mindset a competency that the company is actively developing, both for its employees and for the firm as a whole?

If a company can respond affirmatively to at least a majority of these questions, then it is well on its way to becoming a truly global or transnational company.  A company that can only answer three or fewer has a long way to go.

Bartlett, C. and Ghoshal, S. (1988).  Organizing for Global Effectiveness:  The Transnational Solution.  California Management Review.

“I’ve Gotta Be Me” – Always?

In his wonderful book “What Got You Here Won’t Get You There,” Marshall Goldsmith lists twenty habits that he claims often prevent successful people from becoming more successful.  The twentieth habit he calls “an excessive need to be me.”  Here his explanation of this habit:

Each of us has a pile of behavior that we define as ‘me.’  It’s the chronic behavior, both positive and negative, that we think of as our inalterable essence … If we are incorrigible procrastinators who habitually ruin other people’s timetables, we do so because we’re being true to ‘me’ … If we always express our opinion, no matter how hurtful or noncontributory it may be, we are exercising our right to be ‘me.’

You may recognize this as a variation on the old cartoon character Popeye, who said, “I yam what I yam and tha’s all that I yam.”  There was a popular song many years ago called “I’ve Gotta Be Me” that had a similar theme.

Kerry Lane was an Australian manager of a global medical devices company when she was sent to Japan to open a sales and marketing office in Tokyo.  Smart, ambitious, and highly driven, Kerry saw this as an opportunity to prove herself while acquiring skills and knowledge by working in another country.  She had never been to Tokyo before, although two years ago she had completed a successful six-month assignment in the Philippines to help develop a marketing campaign for one of her company’s products. 

Needless to say, Kerry experienced a series of culture shocks in her first three weeks on the job.  Her new boss, a Japanese who was head of the subsidiary, kept on bowing and apologizing to her, which she found very annoying.  When she met her team of six direct reports, she was surprised at how formal they seemed to be.  In meetings, they would sit quietly in their navy blue business suits (they were all male), and hardly spoke up.  She knew a little bit about Japanese culture, and the head of HR, another Japanese, explained to her some of the differences between the way business gets done in Japan versus Australia.  I get it, she thought to herself.  But this is not the way I do things, and I know that I have been successful doing things a certain way.  Why change now?  Besides, this is not me.  All this bowing and politeness and talking so indirectly!  I would go crazy if I were to adjust my style just because I am in Japan.  Besides, I am not Japanese, and they should understand and adapt to me.

Eventually, Kerry’s frustration got the better of her and after three months, she requested for a change of assignments from head office.

What happened to Kerry, and what could she have done differently?  First, let’s go back to what Marshall Goldsmith points out as an excessive need to be me.  For Goldsmith, the solution to this is for the person to focus less on himself (or herself) and more on other people.  For example, in his case study, a manager who does not like to give recognition and praise to people because “that’s not me” could improve by focusing more on what his people wanted (in this case, a little more praise and recognition) and abandoning the notion of “me.”

This is easier said than done.  What makes this difficult for many are two underlying issues.  First, in my experience, this mindset of “being me” is especially prevalent in what Hofstede refers to as individualistic cultures, where the emphasis is on individual achievement rather than on group harmony.  Cultures like the United States, Australia, and Sweden (to name a few) value individualism and self-advancement.  So when Kerry, and Goldsmith’s example, clings to this notion, their behavior is in part culturally determined.  This is what they have learned by growing up in a highly individualistic culture.

The second issue is the apparent dilemma that is created when people frame the problem as having to choose between being authentic and adapting (that is to say, not being authentic).  I have worked with a number of executives who believe that they are somehow compromising themselves if they were to change their management style.

Here are two pieces of advice.  First, define the handful of values or qualities about yourself that are core to you and that you believe reflect best who you are.  For example:  honest, reliable, hard-working, assertive, self-confident.  Then as you work with people and teams from other cultures, consider how these values might be expressed in these different cultures.  For example, in Thailand, being honest might mean:  keeping your word, being fair, and not cheating.  In America, this might mean:  being direct, speaking your mind.  It may turn out that your Thai colleagues share some of your values, but just express them in different ways.  So the key point here is to recognize that the behaviors that demonstrate a quality or value that you feel strongly about because they mean “being you” may differ by culture.  Therefore, what you might have to do to work effectively in these cultures is to adapt behaviors that are more appropriate for that culture but are still consistent with your underlying values.

The second piece of advice is to expand your comfort zone so you can begin to develop what   Andy Molinsky calls global dexterity.  Every one of us has a style of behavior that we are comfortable with, or that comes natural for us.  And most of the time, we would rather not change our style either because we believe that this works well for us, or because it is too much trouble to learn a different style.  When working across different cultures, there will be a range of behaviors and styles that will be different from what you are used to.  Some will be easier to adapt to than others.  For example, learning how to bow slightly in Japan, or learning how to greet someone in a different language are relatively easy behaviors to learn, and will not require much difficulty in getting you out of your comfort zone.  However, other behaviors - for example, learning how to be more patient rather than being your normal assertive self, learning to read non-verbal’s in high-context cultures – are more difficult to adapt.  So expand your comfort zone by practicing some behaviors that may at first not feel too comfortable for you.  Get help from a friend, a trusted co-worker, or a colleague from another culture so they can give you feedback and coach you.

Goldsmith, M.  (2007).  What Got You Here Won’t Get You There.  New York:  Hyperion.

Hofstede, G.  (2001).  Culture’s Consequences.  New York:  Sage.

Molinsky, A.  (2013).  Global Dexterity.  Boston:  Harvard Business Review Press.

Managing Talent in Global Organizations - Part I

As a young professional in an emerging market, would you rather work for a global multi-national or for a local company?  As recently as five years ago, this question was a “no-brainer” for many bright talented men and women in emerging markets like China, Thailand, Vietnam, and Chile.  Working for a global company, especially one with a “brand” name and a strong reputation was especially attractive.  In many cases, the pay was better but beyond that, the opportunities for developing professionally, as well as advancing (maybe even being sent abroad for an assignment), were far better than they were for local companies.

Recently, executives from several global companies whom I have interviewed paint a far different picture of the competition for talent today, especially in these emerging markets.  First, many global multi-nationals’ growth plans have stalled, or at least have slowed down.  Second, in some cases, these multi-nationals have had to downsize and lay off local staff; in a few cases, companies have exited their markets entirely.  Third, local companies, by contrast, have been growing and in some cases, have begun to grow and expand outside of their home country.  Fourth, as local companies have begun to build a strong managerial base and a more professional development process, the gap in development between global and local companies has narrowed.   And fifth, the gap in compensation packages between global and local companies has also narrowed.

There are of course tremendous advantages that some global multi-nationals have.  Many of these companies have been around for over fifty years, and they have a stable and deep history, which is still very appealing today to many young people in overseas markets.  Furthermore, management practices such as managing by objectives, performance reviews, and coaching are well-established in these companies.  So someone just out of school or coming from a state-owned company or family-owned business to join a multi-national would have significant opportunities to learn about these good management practices.

Nonetheless, the reality is that competing for talent in today’s globalized world, especially for U.S.- and European-based multi-national companies, is as tough as ever, perhaps even tougher.  Here are some examples from my own experiences in working with various multi-nationals and interviewing executives from these firms.

First example.  A multi-national company that was entering the Chinese market was looking for a Managing Director to head their operation.  Originally, the company had discussed the position with an executive recruiting firm to see whether there were suitable candidates from the competition and/or from the region who might be interested.  Fortunately, the company found the right person for the job within the company itself.  He was actually a European who had been with the company for over twenty years and had a good track record.  He had lived in China as a college student, and in fact had married a Chinese and so spoke Mandarin fairly well.  And perhaps as important as these other factors, he and his wife were eager to return to China, and this position was a match made in heaven for them.

Second example.  One of the most difficult leadership challenges is motivating a work force that is about to be laid off – not only the high potentials who would most likely get other jobs anyway, but the majority of the work force.  This was the situation for several manufacturing plants that the company decided were going to be shut down in a year and a half.  The employees knew the company’s rationale and recognized that they would be losing their jobs.  In the meantime, they were expected to continue to be productive, adhere to good manufacturing practices and maintain quality standards. 

Several months after the announcement was made (and about a year before all the plants were scheduled to close), company executives were surprised to discover that in one plant, productivity measures were breaking records.  They sent some managers to the plant to find out what was going on.  What they found was a work place where everyone was engaged – due in no small measure to the actions of the plant manager.  Let’s call him Matt Jackson.  A long-time employee of the company who had gone to night school to get his MBA, Matt was a passionate leader who believed strongly in what he called “treating people right.”   When he found out that his plant was closing, he immediately called a town hall meeting and let everyone know that he would not only be updating them regularly, but that he and his management team would do what they could to help everyone find jobs. 

He set up daily briefings with his direct reports, who in turn communicated these discussions to the rest of the employees.  He set up career centers with his HR department to help every employee work on his or her resume and provide career counseling to everyone who was interested.  The HR team began to contact local recruiters and employment agencies in an effort to find jobs for the plant employees, many of who preferred to stay in the area.  Rather than feeling anxious or resentful about the closings - or worse, distracted from their work - employees became determined to prove that their plant could be productive during its last year and a half of existence.

  

Third example.   I knew an executive who worked for a pharmaceutical company that many years ago embarked on a strategy of globalizing their manufacturing operations.  They turned to Robert Marconi (not his real name), an engineer who had worked locally in the U.S. in the company’s various manufacturing plants.  Robert was single, and eager to go overseas.  For the next twenty years, he helped his company build greenfield manufacturing operations in various countries - selecting a team, hiring locals, directing construction and making sure the plant met FDA approvals.  When I met him, Robert was about to meet with the FDA to walk them through the manufacturing plant that was nearing completion in an Asian country.  He was then in his late fifties, certainly not being considered for a senior leadership position in the company.  But he was a highly valued talent for the company.  It would have been nearly impossible for the company to have replaced someone like him immediately.  This is the kind of person that I call a “critical skills” employee for a multi-national.

Fourth example.  In a consumer products organization where I once worked, its German subsidiary was underperforming.  Germany was one of its largest markets but unfortunately suffered from a lack of strong leadership.  Senior management considered hiring a German from outside the firm to lead the subsidiary but, after much discussion, decided to transfer a high-potential South American to become General Manager.  At first blush, this seemed like a poor fit, at least culturally.  However, Enrique Martinez (again, not his real name) had proven himself well in the small Latin American country he had led over the past three years and was ready for bigger challenges.  Furthermore, he had many of the attributes which the company believed the German subsidiary needed – an inspirational leader who was very results-driven, with strong people skills and an execution mind set.  Martinez moved with his family to Germany and within six months, had accomplished an incredible turnaround.

One of the lessons that these examples demonstrate is that companies need to think about their talent multi-dimensionally.  While there should be an overall corporate talent strategy (much like an overall corporate business strategy), companies should also consider talent strategies for at least four segments of its employee population (as reflected in the examples above):

1.     How do we build successors and create a pipeline for the senior levels of the company?

2.     How do we retain the solid performers and the B-players?

3.     How do we recruit and develop talent at the junior levels?

4.     How do we motivate the critical skills employees in our company?

There is no single answer to each of these questions, partly because the answers depend on the particular industry of the company and its competitive position within that industry, the strategic direction of the organization, and its talent philosophy.  Regardless of the particular approach and talent strategy, however, it is important for companies to keep in mind the outcome:  to have an organization with the best talent to help the company achieve sustainable competitive advantage.  This means having people with the right sets of skills and the right mindsets in all the geographies where the organization does business.

Becoming a Global Leader from a Regional Leader’s Perspective

When Zoe Chang was promoted to become the Asia-Pacific regional marketing head for her company, a major global consumer products firm, she was very excited.  She had been head of marketing for Taiwan for the past five years, and had achieved outstanding results. 

Shortly after her promotion, Zoe flew to the United States to meet with her new boss and her counterparts from the other regions.  She was determined to get an in-depth understanding of the company’s global marketing strategy and its implications for her region.  While in the United States, she also scheduled one-on-one meetings with some potential key stakeholders, such as the Head of R&D and the head of Human Resources.  She spent time meeting with her new boss, hoping to understand exactly what his expectations were and what his perspective was on whether and how to adapt global strategies to fit local markets.  And she accompanied marketing researchers to retail stores where some of the company’s key products were being sold to find out more about consumers and their preferences in the U.S. market.

After returning to Taiwan, she then decided to visit each of the six countries that she was now responsible for and spend time meeting with the marketing teams to better understand their local customers.  While in each country, she took time to explain the company’s global marketing strategies and asked each team how they thought these strategies could be implemented in their market, and where they thought these strategies could be adapted to better fit local market conditions.  She also described her marketing vision for the region, how excited she was to be working with them, and shared some of her expectations. 

Rather than flying “in and out,” as she observed previous executives had done, Zoe made sure to spend a week in each country.  Working with the local marketing head, she developed an agenda for each country that involved meeting with the country head and his functional heads, meeting one-on-one and in groups with the marketing professionals, and visiting retail stores to learn about marketing and consumer practices in the country.  Her evenings were not exactly free either.  She scheduled dinners with several key executives (both from within the subsidiary as well as outsiders, such as key suppliers and government officials) and had at least one group dinner in each country. 

At the end of each visit, Zoe shared with the local marketing head her observations, asked for feedback, and, with the team, identified follow-up actions for her team and herself.  She asked the country manager for feedback, as well as for any additional support or resources that might be needed for the country’s marketing team.

In one country, there was quite a bit of concern and pushback about the pricing for one of the company’s products that were about to be introduced.  Both the country manager and the marketing head were not convinced that the proposed pricing from corporate would be competitive and would generate the expected revenue for the product.  That week, Zoe and the country manager made calls to the Global Marketing head as well as the head of Asia Pacific to express their concerns, and to present data based on market research on competitors’ price points and consumer preferences.  Based on these discussions, the pricing was modified.    

It is too early to tell whether or not Zoe’s approach will lead to outstanding results, but I believe, based on my experience and practices of successful global companies, that Zoe is on the right path to becoming an outstanding global leader.

    

Let’s examine more carefully what Zoe is doing.

First, it is clear that Zoe is adopting a global mindset.  She understands that while headquarters may be driving global strategies, her role is not simply to push this strategy down to the countries but to make sure that she can synthesize and integrate, adapting where necessary to local market conditions. 

Second, Zoe is making an effort to understand her company’s overall strategy and priorities.  At the same time, Zoe is aware that she needs to align her region to the company’s goals, so a clear understanding of the company’s priorities is important so that she can explain this perspective to her country teams.

Third, Zoe is also making an effort to understand local stakeholders’ and customers’ needs.   As Bartlett and many others have pointed out (Bartlett and Beamish, 2008), one of the key challenges of a global company is managing the tension between standardization and customization.  By drilling down so that she is familiar with each market, Zoe will be in a better position to recognize and recommend solutions that meet both corporate needs as well as regional and local needs.

Fourth, Zoe is building relationships.  She understands that in many Asian cultures, relationships come before task.  People will need to trust you first before they will do business with you, and so Zoe is spending time building relationships.  She is doing this both through formal and informal means, spending time in meetings as well as socializing after office hours.

Based on my experience and discussions with many successful regional leaders, these four practices – adopting a global mindset, integrating the company’s overall strategy and priorities with regional and local needs, understanding local customers’ needs, and building relationships – are key to the success of a regional leader in a global company.

Bartlett, C. and Beamish, P.  Transnational Management, 6^th Edition.  (2008).  New York:  McGraw-Hill.