Are Global Managers Portable?

I met Jacques Renard in Shanghai a few years ago, where he was CFO of the subsidiary of a global consumer products company.  A French national, Jacques has had a long career as an expatriate for his company; the last time he worked in his native France was fifteen years ago.  He has been assigned to Austria, Warsaw, Caracas, Jakarta, and now Shanghai.  His wife and their two children are used to moving with Jacques every few years.  Jacques is part of a small but enduring breed of managers who spend their careers working outside their home country. 

As I have written elsewhere, cultural sensitivity and global mindset – in addition to having the right set of technical skills and integrity - are important for success as a global manager.  Recently, I came across a study that suggests that these may not be enough, although this was not a study of global leaders.  Let me explain.  Groysberg et al. examined 20 high-level executives who were leaving one company (GE) to join another company at an even higher level of responsibility (e.g., Chairman, CEO).  In their study, which covered the years 1989 to 2001, they found mixed results for what they called the portability of these executives; some were successful, others less so.  For example, Robert Nardelli went to Home Depot and failed there; James McMerney went to 3M and thrived.  Both were at some point considered to be potential successors to Jack Welch at GE.

Why GE?  For many years, especially during Jack Welch’s time, GE was well known as a breeding ground for leadership.  I know several executive recruiters who used to keep close tabs on up-and-coming GE managers because of the company’s reputation for identifying and developing leadership talent.

What Groysberg and his colleagues found was that portability depended on a match between the executives’ skills and the requirements of the new position in terms of four areas: strategy, industry, relationships and culture/systems/processes. For example, companies’ subsequent performance was better when those executives had strategic skills that were a good match with their new company’s strategic requirements.  If an executive’s strengths were in cost cutting but the new environment required skills in growing the business, the chances were that the executives’ new company would not perform as well.  In other words, the portability of an executive (at least in the limited sample they studied) was a function of the match between the executives’ strengths and the company’s situation in these four areas:  “The more closely the new environment matches the old, the greater the likelihood of success in the new position.”  Subsequent research by Araoz supports this idea that “origin and destination matter.” 

What about managers like Jacques?  Despite the moves from country to country, he and other global managers for the most part remain in the same company.  Will similar cautions apply to the portability of global managers who are assigned to different country subsidiaries?  Or does having cultural sensitivity and a global mindset trump any potential mismatches in portability?

Many years ago, the company I was working for acquired a small business in an African country that was founded by a very successful entrepreneur.  To help integrate this business with the company, we sent a British manager who I shall call Philip.  He had been with the company for over twenty years, had been assigned to several overseas subsidiaries during that time, was highly experienced in operations, and was very familiar with the company’s culture and processes.  Unfortunately, Philip did not do well in his assignment.  His constant clashes with the local founder and his attempts to run a command-and-control operation did not fit with the loose, free-wheeling culture of the local company.  Using the Groysberg framework, there were mismatches in all of the four areas:

·      Strategy.  This was a situation that called for an executive with skills in blending together an entrepreneurial company with a massive global enterprise; Philip had never faced this kind of challenge before.

·      Industry.  As an emerging market, this country’s regulatory environment was not sophisticated, consumers had little awareness of the brand that the global company represented, and the competition was mainly other local companies.  These were unfamiliar challenges for Philip, and very different from what he had faced in the past.

·      Relationships.  Philip flew in “solo;” he had met the founder briefly but had no friends or allies in the company whom he could trust.  As a result, he had blinders on and was not able to get feedback or advice that could have helped him adjust his behavior and style.

·      Company culture/systems/processes.  Philip was used to working in a bureaucratic environment where processes were defined and well established.  Nothing in his past experience prepared him for this situation.

While Groysberg’s framework certainly fits, a certain level of cultural sensitivity and global mindset on Phil’s part could have helped mitigate these risks.  For example, being willing to learn about other cultures and building connections (two critical elements of global mindset) would have helped him understand the local company’s industry and processes, as well as establish productive relationships.  Therefore, the first screen in selecting potential global managers is still their global mindset orientation.  Assuming that companies have vetted their global managers on global mindset, what if it is apparent that there will not be a good match?  A company has three alternatives:

1.     Find someone else in the company with a better match for the situation, while sending the manager to another country where there is a better match for him or her.  This presupposes that the company has a pool of such managers and the capability to match them to the most appropriate situations.  If not, at least find the closest matches.

2.     Fix the manager by providing her with some counseling and coaching.  A global manager who may not be familiar with the regulatory environment in the country she has been assigned to can prepare by learning from more experienced colleagues about what to watch out for, consulting with country experts, or doing a lot of homework. 

3.     Fix the situation to enhance a better match, for example, by sending the global manager to a subsidiary where he already has a network.  Angela was a global manager for a technology company who had led a global team whose members were primarily in India.  When there was an opening for a manager to be assigned to the company’s Indian subsidiary, she was the logical choice, and Angela was able to take advantage of the alliances that she had already built in the subsidiary to have a successful assignment there.

Araoz, C.  (2014).  It’s Not the How or the What But the Who.  Boston:  Harvard Business Review Press.

Grosberg, B., McLean, A. and Nohria, N.  (2006).  Are Leaders Portable?  Harvard Business Review.

A Checklist for Global Managers

In his book, The Checklist Manifesto, Dr. Atul Gawande writes about what Wal-Mart did in the wake of Hurricane Katrina.  As you may recall, this was a major disaster in New Orleans, where 80 percent of the city was flooded and 20,000 refugees were stranded at the New Orleans Superdome.  Another 20,000 were at the Convention Center.  There was no power in the city hospitals.  Wal-Mart closed its 126 stores, but within 48 hours, more than half of them were up and running again.  Wal-Mart employees and managers somehow mobilized, with the use of simple checklists:

“They set up temporary mobile pharmacies in the city and adopted a plan to provide medications for free at all of their stores … They set up free check cashing for payroll and other checks in disaster-area stores.  They opened temporary clinics to provide emergency personnel with inoculations … within two days of Katrina’s landfall, the company’s logistics teams managed to contrive ways to get tractor trailers with food, water, and emergency equipment past roadblocks and into the dying city.  They were able to supply water and food to refugees and even to the National Guard a day before the government appeared on the scene.” (pp. 77-78)

Gawande’s point is not to praise Wal-Mart, nor to point to the superiority of the private sector over the public sector (i.e., FEMA).  This situation is where he started to understand the power of having a checklist.

As another example, Gawande writes about the Chairman of Surgery at the University of Toronto, who has been using a 21-item surgery checklist to catch potential errors in surgical care.  What is interesting is that the checklist also includes a team briefing.  “The team members were supposed to stop and take a moment simply to talk with one another before proceeding – about how long the surgeon expected the operation to take, how much blood loss everyone should be prepared for, whether the patient had any risks or concerns the team should know about.”  (pp. 100-101)

In surgery, according to Gawande, you can have checklists for three of the four big killers:  infection, bleeding, and unsafe anesthesia.  The fourth killer in surgery is the unexpected.  So how do you prevent this?  The value of having a checklist is that it facilitates a dialogue, and people have to stop and talk through the case together before surgery. Unfortunately, according to Gawande, this kind of teamwork is not common in surgical teams.  Some research that he cites shows that team members that regularly used checklists showed great improvements in their ratings of their own teamwork. 

According to Gawande, “ … under conditions of complexity, not only are checklists a help, they are required for success.  There must always be room for judgment, but judgment aided – and even enhanced – by procedure.” (p. 79)

What kinds of management situations might a checklist be used for?  Actually, Professor Michael Useem has come up with his own checklist for leaders, consisting of 15 principles.  Like Gawande, he argues that “ … when uncertainty becomes the norm and turbulence more commonplace … a Leader’s Checklist becomes more consequential.”  (p. 41)

Many of the items in Useem’s leader checklist can apply to managers leading globally.  They include articulating a vision, communicating persuasively, and building leadership in others.  However, as many of you know, global leaders face different circumstances and need to take into consideration other cultural variables. 

So I have come up a checklist for global managers.  The “targets” referred to in this checklist are those individuals, groups, or organizations from another culture that you will be interacting with.

1.     Understand your cultural assumptions. 

·      Are you aware which of your management style preferences and behaviors are influenced by your culture?

·      Are there aspects of your management style or behavior that works in your culture that might not work in other cultures?

2.     Map your targets’ cultural values.

·      What are the most important cultural values of the people or group you will be dealing with?

·      How do these values show up in how they do business with others?

3.     Establish cultural baseline behaviors with your targets.

·      Are there specific behaviors that you should be avoiding when dealing with them?

·      Are there specific behaviors that you should be sure to demonstrate when dealing with them?

4.     Clarify your managerial goals and your core values.

·      What do you hope to accomplish – not so much in terms of the task or work, but in terms of your management of your targets?

·      What are the most important values you hold, especially around management?

5.     Identify culturally appropriate options to achieving these goals.

·      Are there alternative ways to achieve your goals that might be more culturally appropriate?

·      Which of these may require your getting out of your comfort zone?

6.     Seek feedback and mentoring from others.

·      Are there people from the cultures you are dealing with, that you can approach to ask questions and get feedback?

·      Do you have a plan on building relationships with these individuals so you can gain their trust?

7.     Adjust, experiment and continuously improve.

·      Are you reflecting on what you are learning about others’ reactions to you and the feedback you are getting?

·       How are you applying what you have learned to improve yourself in your cultural interactions?

8.     Preserve your character and integrity.

·      Are people clear – not so much by your words but by your actions – on what you stand for?

·      Are you clear on what you stand for?

Gawande, A.  (2011).  The Checklist Manifesto.  New York:  Picador.

Useem, M.  (2011).  The Leader’s Checklist.  Philadelphia:  Wharton Digital Press.

Fostering a Global Mindset Culture in Your Organization

A recent “Idea Watch” article in Harvard Business Review reported on some new research that Carol Dweck and her colleagues are conducting.  As some of you are aware, Dweck popularized the concept of “growth mindset” (versus a fixed mindset).  People with a growth mindset, according to her early research, enjoy challenges, strive to learn and consistently, and see potential to develop new skills. 

Now she has been exploring the idea whether organizations can have growth or fixed mindsets. So far, her research seems promising.  She and her team have developed a survey that has been implemented among employees at seven Fortune 1000 companies.  Employees rate the extent to which they agree with a series of statements, such as “When it comes to being successful, this company seems to believe that people have a certain amount of talent, and they really can’t do much to change it.”

Dweck concludes that there is a great dal of consensus about what the prevailing mindset is in these employees’ organizations with regard to growth.  Her research shows that employees in growth mindset companies are:

·      47% likelier to say that their colleagues are trustworthy

·      34% likelier to feel a strong sense of ownership and commitment to the company

·      65% likelier to say that the company supports risk taking

·      49% likelier to say that the company fosters innovation.

Similarly, I believe that organizations can be assessed on whether it has a global mindset culture, above and beyond the presence of employees who have the traits or qualities of an individual global mindset.  Of course, hiring and developing such individuals in your company is helpful, but can be inefficient since it may take companies a long time to reach the critical mass needed.  Another approach therefore is to develop an overall strategy to build or improve the organization’s global mindset culture.  The first step in developing this strategy is to diagnose your company’s current state with regard to its global mindset culture.  So here are eleven key indicators that will help you assess your company’s current global mindset culture.

1.     Top management commitment to building a global mindset culture.  How regularly do the senior executives in your company reinforce the importance of thinking globally and recognizing the importance of markets other than the home market?  How often do executives travel overseas to learn about the importance of these markets – especially from their overseas subsidiaries?  How frequently do managers and executives from overseas subsidiaries come to headquarters to participate in meetings?  Are key executives from overseas represented in important task forces and corporate initiatives?

2.     Structures and processes for global alignment and coordination.  What formal and informal mechanisms has your company put in place to facilitate efficient and effective coordination across countries where your company does business?  How well defined are your company’s formal structures, such as matrix relationships, global and regional roles, and roles and responsibilities of headquarters and subsidiaries?  When global teams are created, how well represented are subsidiaries from relevant countries?

3.     Infrastructures for global communication.  Has your company invested in the necessary technologies to enable efficient communication across countries?  And how much training and support is being provided so employees can take advantage of these new tools?

4.     Assessment of global mindset potential.  How important does your company consider global mindset in selecting internal or external candidates for positions that will require cross-cultural interactions?  Is cultural fit one of the criteria used before assigning individuals to global roles?

5.     Use of development assignments to build global mindset.  When setting development plans for individuals who may have high potential, what opportunities are provided for them to learn and acquire experiences in working across different markets and cultures?

6.     Reducing the headquarters ‘center of gravity.’  Has your company considered relocating some key functions out of headquarters into one of its key markets overseas?  Are at least some of your company’s centers of excellence or expertise located overseas?  Are regional heads and their staffs still based in headquarters or have they moved out to the regions?

7.     Cross-cultural awareness and sensitivity as a key element in the company’s learning strategy.  How available and accessible are resources for employees to improve their cross-cultural awareness (e.g., on-line courses on doing business in different cultures, reimbursement for language training, etc.)?

8.     A global talent pool.  How inclusive is your company’s global talent management process?  For example, when considering internal candidates for key positions, does the slate of candidates include highly qualified employees from different locations?

9.     Recognition and rewards for those with global mindsets.  How valued are those individuals who have proven themselves in overseas assignments, not just in improving business results but also in being recognized as someone who has worked effectively with different cultures?  When these individuals complete their assignments, to what extent does your company leverage their experience?  Does your company’s competency model and performance evaluation system include global mindset behaviors as a key element?

In a recent study by Price Waterhouse Coopers (Wang, 2014). 4,108 return migrants from 81 countries of origin who had spent between three months and two years in the U.S. at some point during the years between 1997 and 2011 under a category of the J-1 visa designated for professional training completed a survey.   These respondents all had bachelor’s or master’s degrees, and had work experience in many industries with companies such as Google and JPMorgan Chase, as well as thousands of small startups and midsized companies.

What did they find?  While almost all of the respondents reported having learned about practices overseas that they could implement in their home countries, only 67 percent reported having shared any of this knowledge upon their return. And only 48 percent reported having shared knowledge and then having seen this knowledge implemented.   The study concludes:  This means that on average, for every two workers with international experience hired by a given firm, only one will successfully share knowledge from overseas at some point during his or her tenure.

Interestingly, countries like China, India and Brazil are creating incentives to entice their foreign-trained nationals to return.  A recent Wall Street Journal article described the emergence of these “sea turtles,” the term used for a Chinese native who is returning home after several assignments in the West.  The article mentions several such Chinese businessmen who, after working for multinationals like Coca-Cola and Nike in the U.S., have decided to return to China, often in much larger roles and with much greater compensation than they had in their former companies’ headquarters.  Aside from these considerations, there is the perception that the opportunities with a Chinese company are greater, as are the psychic benefits.  For example, Guo Xin, a sea turtle who joined a Chinese recruiting firm, said, “You’re making global decisions rather than having these decisions made for you” by Western headquarters. 

10.  Support for individuals on overseas assignments.  Does your company provide ongoing support for individuals on overseas assignments – before, during and after the assignment is over?  In Ernst & Young’s Global Mobility Effectiveness Survey (2013), they found that on average, 16% of assignees left the company within the first two years after repatriation, and a further 41% returned to their pre-assignment position.  Does your company require some form of cultural training for the individuals and their families prior to an overseas assignment.  For example, BASF works with an outside vendor that helps international assignees adjust to their new surroundings.  The vendor also provides “cultural attaches” who will help BASF employees with the day-to-day logistics of settling in a new country, e.g., finding apartments, completing mandatory state registrations, setting up bank accounts, etc. 

In another company, I helped develop an expatriate mentorship program whereby international assignees were assigned to senior executives as mentors, with the condition that these senior executives had to be outside these individuals’ functions.  For example, the CIO volunteered to mentor two individuals in Marketing and two managers in Finance who were all in overseas locations.  He kept in contact with them throughout their assignments, and helped facilitate their transition back to their next assignments.

11.  Formal and informal processes for sharing best practices globally.  When he was CEO of GE, Jack Welch was relentless in promoting knowledge management, and he held people accountable to make sure that they were proactive in communicating and sharing best practices.  How much sharing of information and best practices goes on internally in your company, and are there formal and informal mechanisms for facilitating the dissemination of these best practices?  Somewhat belatedly, for example, GM has just begun to implement this.  In an interview with the Wall Street Journal (November 2, 2014), President Dan Ammann described what the company has started to do:

“A couple months ago we brought about 25 of the top sales leaders from around the world together in Charlotte, N.C.  We conducted workshops where each discussed the tactics they are using in their home markets to drive sales, work with dealers and interact with customers.  This is the first time anyone can remember that happening.”

      Perhaps next time they should meet in Beijing, Sao Paolo, or Mexico City.

Once you’ve done your assessment, then you’ll have a better understanding of where the gaps are, and your organization can begin to prioritize actions to narrow these gaps, taking into account the organization’s overall strategic goals and where the best payoffs are.  For example, if the organization is planning a major expansion into China over the next three to five years, then assessing cultural fit among high potential employees (#5) and establishing an office in one of its cities (#6) should be high on the list of actions.

Bennett, J.  (2014).  GM’s Ammann Drives for Change.  Wall Street Journal, November 12.

Chu, K. and Lublin, J.  (2014).  Chinese firms bring more natives home.  Wall Street Journal, September 3.

Gupta, A. and Govindarajan, V.  (2002).  Cultivating a Global Mindset.  Academy of Management Executive, 16(1), pp. 116-126.

Idea Watch.  (2014).  How Companies Can Profit from a Growth Mindset.  Harvard Business Review, November, pp. 28-29.