Globalization means a blossoming of business opportunities like never before. "Global trade in goods and services could rise more than threefold to $27 trillion in 2030," according to the World Bank report "Global Economic Prospects 2007: Managing the Next Wave of Globalization."
According to the report, "Roughly half of the increase is likely to come from developing countries - countries that only two decades ago provided 14 percent of manufactured imports of rich countries, but today supply 40 percent, and by 2030 are likely to supply more than 65 percent."
But with increased access to global sales, capital, goods, and services comes a slew of strategic and operational challenges, such as new competitors, exposure to risk, and unfamiliar regulations. The only hope an organization has to tackle these challenges and capitalize on the immense opportunities is the ability of its leaders to function in a global market.
Outsmarting competition, protecting assets, and contending with regulations is far less of a challenge when you have the right people in place. Senior leaders who can operate globally are the essential piece of a global talent strategy, but many companies don't yet understand how to identify and develop this new generation of managers.
Leaders vs. global leaders
An excellent leader doesn't necessarily make an excellent global leader. So, why not?
Though trust and respect are universal priorities for any leader, a global leader understands - or can find out - how the execution of certain universal practices translates from one culture to another. Chinese business partners, for example, are not likely to appreciate a Texan's big bear hug and hand gestures.
What shows familiarity in one culture can be invasive or offensive in another. During negotiations with a manufacturer in Russia, one should expect more than one "final offer" and bargain for the best price. Persistence in negotiating details after a final offer is made in other locales - including the United States - would not produce an attractive result.
However, leading globally is more than knowing which hand to shake or how to address someone from another culture in a way that conveys respect. For aspiring and incumbent global leaders, success requires a unique mix of knowledge, experience, competencies, and personal attributes.
Global leader DNA
What, specifically, should you look for in a global leader? Research conducted by DDI examined leaders who could successfully cross countries, economies, and cultures to achieve wide-reaching, global objectives. Interviews were held with 25 senior human resources and operations executives at 22 global organizations across an array of industries. Those conversations led to a list of 10 factors that make up the leadership DNA of a standout global operator. These global leadership traits are pivotal elements for achieving success.
Intellectual grunt. Thinks conceptually and makes strategic decisions, and is able to deal with both complexity and ambiguity.
Contextual chameleon. Adaptable and exhibits cultural sensitivity, with the ability to modify behavior for different situations, localities, or audiences.
People black belt. Brings out the best in people; exhibits authenticity; builds trust; and builds strategic working relationships to engage, motivate, and inspire individuals within various cultures.
Global explorer. Exhibits learning agility, is a passionate information seeker, and asks a lot of questions to understand foreign concepts or culture.
Master mobilizer. Displays propensity to lead, is flexible and organized, drives execution, exhibits leadership influence, and mobilizes resources.
Visionary. Thinks conceptually and effectively navigates ambiguity, displays entrepreneurial flair, and can devise strategies to take business to a higher level.
Humility. Receptive to feedback, willing to adjust a strategy, maintains a learning orientation, and possesses accurate self-insight.
Solid as a rock. Demonstrates authenticity, resiliency, and sound operational decision making or judgment.
Company poster child. Balances demands of the culture with results and leads with vision and values while displaying executive disposition.
Unbridled energy. Possesses extraordinary capacity for focus and productivity, and can turn up the energy in a fast-paced, always-on environment.
Global leader identification
Global leaders - people skilled or naturally inclined with the traits listed above - typically don't come knocking on your door. Consequently, organizations must work hard to identify, select, and develop leaders for the international stage. An organization can start by designing a comprehensive strategic talent plan.
Start with the end in mind. Define what it will take for your organization to succeed globally over the next three to five years. Ask yourself whether your organization has leaders prepared to tackle these challenges. If not, how can you accelerate their readiness?
Paint a clear picture of what success looks like for your organization. Define the essential experiences, knowledge, skills, personal attributes, and motivations your global leaders will need for exceptional performance.
Be realistic. An individual's hardwiring - the personal style and attributes she brings to the table - greatly affects how that person operates. While some of these attributes can be developed, many cannot. Understanding this difference is essential when making global talent decisions.
Identify early the potential global leaders. The first objective for firms embarking on a global leadership strategy must be to identify potential global leaders, both within the company and among external candidates. Successful organizations have in place systematic approaches for early and reliable identification of high-potential leaders. It's critical that those involved in identifying and grooming candidates have both a solid understanding of leadership potential factors and the criteria used to judge candidates.
By instituting an effective process, organizations have clear criteria for predicting leadership potential, as well as the tools to quickly integrate decision makers' perspectives. Ultimately, a strong process equips your organization with the capability to identify and focus development resources on people who will yield the highest return-on-investment and provide a pipeline of qualified leadership talent to meet increasing demands.
This sort of practice also helps companies avoid common mistakes, such as
- focusing solely on current performance
- relying on inconsistent criteria to evaluate leaders
- failing to have a common vision for future global leadership
- letting perspectives and opinions go unchallenged
- accepting provincialism and promoting your own strategies
- focusing mainly on strengths and giving little attention to improving weaknesses.
The result of a successful identification process is that you will more readily identify high potential global leaders - and you may be surprised by some of the top contenders.
Assess and select global leaders. There are few HR decisions more important than assessing the readiness of high-potential candidates for global leadership. A robust assessment helps organizations accurately identify and develop new, aspiring, or experienced leaders. Once you've obtained an indepth evaluation of a leader's strengths and development needs, the data can be leveraged several ways.
In the short term, the results enable you to make better hiring and promotion decisions, which dramatically increases the probability of successful executive performance and reduces time to business impact. For the long term, you can use assessment data to accelerate development, so high-potential global leaders are ready when you need them.
At the executive level, an effective assessment process should measure candidates against your most important business drivers such as entering new global markets, executing competitive strategy, and driving profitability. It also should gauge a potential leader's ability to address cultural priorities, values, and beliefs, as well as general leadership requirements such as business acumen, talent development, and execution capabilities.
One proven method of readiness assessment is to place new, aspiring, or veteran executives in a business simulation as a global leader for a day. During this experience, prospective global executives are bombarded with scenarios, asked to make decisions that they would likely encounter in the real world, and put action plans in place. Participants also make presentations on global business strategy, coach staff, and interact with the media.
No organization achieves a 100 percent success rate when moving candidates into global leadership positions. But successful organizations can significantly improve their overall operational and financial performance by moving that success rate as close to perfection as possible. These companies understand that pushing a marginal candidate up the global leadership ladder not only exhausts both time and resources, but often results in disaster through underperforming operations, botched market entries, or irreversible regulatory and financial problems.
Companies with successful selection systems assess candidates in a variety of ways, including the use of competency models, tests, simulations, and behavioral interviewing.
Global leadership development
There is no one-size-fits-all global leadership development approach, but there are several best practices you should keep in mind.
Start with a cross-cultural executive development program that brings diverse leaders together and helps facilitate their transition into a new role. Additional training addressing culture that is unique to a country or region helps avoid embarrassing faux pas.
Try sending potential global leaders on foreign assignments and experiential training that will take them out of their comfort zone. In addition, make use of in-country leadership coaching, peer mentoring, and support networks that offer growth opportunities.
Finally, develop a strong HR support system, such as online leadership support systems or performance tracking measurements that can help leaders improve soft skills and fulfill their corporate mission effectively.
For organizations with the will to succeed, developing global leaders offers many rewards. It requires the right resources, talent, and HR tools. But when organizations do it right, excellent global leaders will help companies leverage new markets, attract new customers, find new sources of capital, and grow beyond even their wildest expectations.