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Published: January 6, 2009

 
 

It’s Getting Diverse at the Top

Local Manager to Global Executive
One reason it’s important to identify employees with global talent early in their careers is that it takes time to develop people for worldwide postings. Once a French manager has been successful in Paris or an Indian executive in Mumbai, what should a multinational company do with that person? “The issue is turning somebody from a very good senior executive in a particular market into someone who’s capable of being a very senior executive in a global role,” says Ashley Stephenson, an Australian who has recently moved to New York to co-lead Egon Zehnder International’s global practice, which conducts 6,000 executive assessments a year.

There are right ways and wrong ways to develop executives who aren’t native to a company’s headquarters country. Some multinationals make the mistake of, for example, transferring an Indian manager from Mumbai to Geneva without providing assistance in adapting to the dramatically different culture. Even the most accomplished executives need help in making such significant transitions.

In addition, top management and their human resources departments must be sensitive to the cultural needs of their high-potential transfers, Marsili says. Many executives from outside of the U.S. find it difficult to leave aging parents or to move with children in school. So for them, Colgate devises short-term assignments of up to six months to give them exposure with minimal disruption to their personal lives. “It gives us some comfort that their eyes are being opened by being in a different environment,” he adds.

Another important ingredient of a successful posting to a new market, Ramakrishnan says, is not squeezing the executive into an unfamiliar area of responsibility right away. “The thing a company should not do is change a person’s function and geography at the same time by, say, transferring a marketing talent from India to run a profit-and-loss unit in Europe,” he says. “That would be a mistake.”

When the executive has been seasoned and is ready to move into a top job at headquarters, he or she almost certainly needs some form of mentoring or coaching. “Somebody needs to be there to help them maneuver their way through corporate headquarters,” says Ramakrishnan. “They need someone to say, ‘Here’s how you get things done.’ ”

CEOs also need to make sure that the culture at the companies’ headquarters is not too parochial. United Technologies Chairman George David says his U.S.-based company’s culture is based on performance metrics that strip out any subtle bias against foreign nationals whose language or cultural skills may not be on a par with American peers. It appears the metrics are working: David was recently succeeded as CEO by Louis R. Chênevert, who is French Canadian.

Thus far, nationals from Australia, the U.K., Canada, Latin America, and Europe seem to have an edge over other nationalities in moving up the ranks to the CEO’s spot at American companies. The CEOs of Dow Chemical and Kellogg are both from Australia. Muhtar Kent, who holds dual Turkish and U.S. citizenship, has taken over the top job at Coca-Cola. Alain Belda, a native of Morocco who was educated in Brazil, has recently stepped aside as CEO at Alcoa to make way for German-born Klaus Kleinfeld, most recently CEO of Siemens in Germany.

However, Indian executives are starting to make headway on the U.S. corporate ladder as well, as evidenced by Indra Nooyi’s ascension to the CEO’s job at PepsiCo, replacing Steve Reinemund. Wood, of SpencerStuart, recently placed Dinesh Paliwal from ABB as chief executive officer of Harman International.

According to Ramakrishnan, executives from India have a few advantages at U.S. companies over talent from other global markets. One simple issue is language: “Growing up, most of the Indians who come to the United States have learned to speak English fluently,” he says. Also, the education system in India is focused on math and science, which are skills much in demand in the U.S. as its own science and math programs trail worldwide benchmarks. Finally, the preponderance of cultural, linguistic, and religious groups within India demands that the country’s citizens be able to function in a diverse society, which is good training for a career in a multinational corporation.

 
 
 
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Resources

  1. Frank Birkel, Jonathan Harper, and Edward Speed, “The Changing Role of the Country General Manager in CPG Multinationals” (PDF), (SpencerStuart, July 2008): Details why local general managers are a logical pool of eventual CEO candidates in consumer products firms.
  2. William J. Holstein, “The Decline of the Expat Exec,” s+b Leading Ideas Online, 07/29/2008: Peter Felix, president of the Association of Executive Search Consultants, on the effort by U.S. multinationals to hire local executives in foreign locales.
  3. Umesh Ramakrishnan, There's No Elevator to the Top: A Leading Headhunter Shares the Advancement Strategies of the World's Most Successful Executives (Portfolio, 2008): Examines what it takes to rise to the top of major companies.
 
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