Beyond The Borders

HR executives whose companies appear on a "Most Admired" list exclusively recalibrated for HRE share insights into how they're successfully tackling global-leadership challenges.

Tuesday, December 1, 2009
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Jill Smart, the chief human resource officer for Accenture, is on the phone, talking about a challenge she faced a few years ago. An office in India needed to recruit thousands quickly. They were overworked and overtired, and she thought the local HR staff needed help to handle the sudden increase in candidate and resume volume.

Smart needed to come up with a quick and elegant solution that would ease the burden on the local staff, provide training to handle similar problems in the future and be usable to assist other offices as well.

Then, the interview with this reporter starts to get muffled by that "underwater effect," that dreadful gurgling sound that heralds an imminent dropped cellphone conversation. After about 20 seconds of dead air, Smart returns and apologizes, unruffled.

"We're going through a tunnel," she says. "We do these interviews in real time, wherever we're going, because we're never really in just one spot." In fact, Smart is in Manhattan, on her way to catch a flight to an office in Johannesburg, South Africa. Only a couple days earlier, she attended a meeting of Accenture's board of directors in Dublin, Ireland, where the company is incorporated.

In her 29 years of employment with Accenture, Smart has never known what it's like to work out of her company's headquarters, because her company doesn't have a headquarters, at least not in a traditional sense. Operating in 52 countries with almost 180,000 employees,

Accenture may be the embodiment of the true global company. In the United States, Accenture has offices in more than 23 states and 30 cities, including San Francisco, Dallas, Atlanta, New York and Chicago, the latter near the site of its global training center. But it's never called anyplace "home" ... and tends to view its home as everywhere.

"It's just a way of life for us," says Smart.

Increasingly, over the past couple of decades, more companies have begun to adapt to a similar way of life. Whether through acquisitions or a determined singular business strategy, corporations have reached beyond the blue horizon of their native soil to expand and set up shop as global enterprises.

Research from the Hay Group, a management-consulting firm based in Philadelphia, indicates that, while there is no single path that corporations use to create a global presence, some of the stars of global industry share common traits, such as aligning business and cultural strategies, emphasizing the importance of training and increasingly diversifying the cultural makeup of their top executive teams.

For the fifth year, Hay Group has recalibrated its "Most Admired Companies" list for Fortune magazine to create the exclusive "Most Admired for HR" list for Human Resource Executive® magazine. The HR-focused list from Hay Group is derived from the firm's key data within its "Most Admired" list, recompiled with a focus on what Hay Group officials term "attributes of reputation" for HR.

To create the "Most Admired Companies" rankings for Fortune, Hay Group surveyed more than 3,700 executives, directors and analysts to rate companies in their own industries on eight criteria. Half of those criteria that describe essential HR functions -- Management Quality, Product/Service Quality, People Management and Innovation -- were then pulled and recompiled to create HRE's "Most Admired" list.

Katie Lemaire, a consultant based in the Boston office of Hay Group, says it was a surprise to learn that there wasn't a single strategy that corporations seemed to use to become successful global businesses.

"Our research set out to ask the question, 'What structures best enable companies to be global, and to be among the most admired,' and the answer is, 'There's absolutely no one answer to that,' " she says. If there is a common thread, she adds, it's that the global structure needs to be aligned with the business strategy.

Still, there are areas where companies that rank high on the most admired for HR list appear to intersect. Mark Royal, a senior consultant in Hay's Chicago office, says most successful global organizations depend on technology to help them in the areas of performance, compensation and communications. But relying on a single business strategy and depending on technology as a great equalizer doesn't solve every challenge.

"Global leaders will often tell us that, while formal procedures and controls are important, they aren't enough to create the kind of alignment they need across the organization," says Royal. To create that alignment, he says, they essentially uphold a common vision throughout the organization and tie that vision to the brand. "[They try] to reinforce that commonality around culture, vision [and] values that complement the formal systems," he says.

Culture and Brand

For Smart, there is no substitute for actually walking through the doors at one of Accenture's offices. Aligning cultural values with the corporate brand is one of the company's keys to success in maintaining professional consistency. It works well enough that she was surprised when she first visited the Bangalore, India office.

"You would have thought you were in New York or Chicago or London, in terms of the look and feel," she says. She cites Accenture's emphasis on consistent and culturally mixed leadership training and development programs as one of the key reasons its corporate culture can be replicated in any location.

Even in tough economies, says Lemaire, companies invest a lot to maintain that cultural vision through training and development.

Cincinnati-based Procter & Gamble, also among the Most Admired for HR companies this year, depends heavily on the common culture that arises out of a mix of shared corporate history, brand and networking, says Moheet Nagrath, vice president and global human resources officer. And like other companies that made the list, technology helps deliver the shared business strategy, which is reinforced by the corporate philosophy.

Operating in more than 80 countries, Nagrath says, Procter & Gamble functions on a five-year business plan that aligns business objectives, goals, strategies and performance measurements. The plan is distributed to leaders in the company's business units throughout the world, first by region, such as Asia and Eastern Europe, and then to countries and branch offices.

"Virtually every discipline, HR included, has its own set of technologies that are global in nature and its own set of strategies that are global," he says. "I have a leadership team for HR around the world, and we share the same priorities with every country."

Technology can't communicate a shared cultural philosophy, though, and Nagrath says those common core values have helped the company overcome political speed bumps in its path toward becoming a global organization. There are three elements that Procter & Gamble depends on to communicate that vision: corporate history, recruiting based on growth potential rather than experience, and networking opportunities.

"We've been around for 172 years, and the whole notion of integrity and the consumer has been ingrained in P&G for 172 years," he says. "History plays a role in that aspect."

Also playing a role is the company's preference for hiring candidates who want to grow in the company; many are recruited from universities. "We typically don't hire people who have experience," unless that recruit has an essential skill, such as an attorney or art designer, Nagrath says. Procter & Gamble wants every employee to mature in the company, he says. "All of our human resource practices," he says, are designed to motivate, train and retain employees throughout their careers.

That strategy pays off, not only through dedicated employees, but also through workers who become steeped in the company's culture and core values, regardless of where they are in the world, until they're the guests of honor at their own retirement dinners.

"All of our human resource practices -- our compensation, our benefits -- are geared toward motivating growing, retaining [and] moving the person throughout their career," he says.

The company's top executives today, says Nagrath, have been carefully cultivated with broad global exposure, executive training and coaching from senior management "since they joined P&G two and even three decades ago." It's a process that the company continues today to keep the executive pipeline full. Once employees are identified as executive candidates, the company broadens their global experience, while providing executive coaching and mentoring.

"When I'm interacting with a colleague in China, in Argentina, in Geneva, there are differences, but essentially, we're talking the same language, which makes it easy to work globally."

Passport, Please

Royal says Procter & Gamble shares another trait with many other Most Admired companies, in that it prides itself on sending high-potential executives to posts outside their own countries.

"They really look to international experience early in their careers as a way to build the kind of global perspective they need in their leadership to manage a global organization," he says.

Not every global company gets it, according to Fred Foulkes, director of the Human Resources Policy Institute at Boston University's School of Management. Some corporations still haven't recognized that international experience and diversity can provide a competitive advantage.

"It's very risky to take a global assignment in some companies," he says. "Out of sight, out of mind. There's a joke: In some companies, it's better to get your global experience standing next to the globe outside the president's office."

Foulkes suggests a simple litmus test to determine which global companies understand the value of global representation: check passports. "If we take the top 100 executives of a [global] company, how many passports are represented?" The companies that get it, he says, will show a wide variety of passports from Europe, Asia and other locales.

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"Some companies are really working hard to make sure that diversity means [they] have lots of people of different nationalities in senior positions and in the pipeline," says Foulkes.

Gaining that sort of representation in senior leadership means establishing the corporate culture and business practices, training on the local level and creating a strong succession strategy for employee engagement.

Judith Edge, corporate vice president for human resources at FedEx, says no one is going to get a world view from the windows of its headquarters in Memphis, Tenn. FedEx operates in more than 220 countries and territories. So the transportation and business-services company, like other Most Admired companies, depends on expatriate assignments for executives, as well as global training programs in Memphis.

A standard program Edge uses is to send U.S.-based executives to any new startup area around the globe. "They make sure the [FedEx] culture is up and running, and then, once we feel that things are established, we replace the expatriate with a local national. It's important that [local] employees see upward mobility within the organization," thereby increasing global-executive diversity, she says.

Equally important is global training and executive development, says Edge. "We have a global succession plan for every officer. That's the top 1,200 people in the organization, and they all have succession plans, no matter where they are in the world." Edge says HR encourages executives to seek out potential talent across geographic or operating-company boundaries.

The top 20 or so global vice-presidential candidates -- those FedEx taps as having the greatest leadership potential -- are fast-tracked for senior-leadership training. Through its program called Excel, these high-performing officers gather at the company headquarters each year to work on strategic business initiatives for the company. The company benefits from their perspectives and the executives benefit from the networking opportunities, says Edge.

Sometimes, training relies heavily on reinforcing a culture of service and caring, particularly in an industry that is dependent on a personal touch.

David A. Rodriguez, executive vice president of global human resources for Marriott International Inc., says the hospitality behemoth operates in more than 65 countries and places a premium on cultural training in addition to business strategy, so executives and managers understand how Marriott conducts its business both in terms of dollars and cents and philosophically.

General managers from around the world, as well as the company's 200 most senior executives, receive training at the corporate headquarters in Bethesda, Md. The training, says Rodriguez, is "heavily dependent on company culture and our philosophy around caring for people."

No hotel is going to stay in business for long, obviously, if the management falls short on caring, and Rodriguez says the concept of caring for others transcends all geographical and language barriers.

Befitting its non-headquartered structure, Accenture uses three training centers, says Smart. One center, located just outside Chicago in St. Charles, Ill., is for senior-executive training, to sharpen overall business skills. Another location is in Milton Keynes, outside of London, and a newly created technology-based facility in Kuala Lumpur, Malaysia. At the St. Charles location, executives from around the world are brought together to help maintain a diverse pipeline.

Boots on the Ground

Regardless of where training occurs, the desired result is that executives will return to their posts and help to strengthen the company's culture and continue to network wherever they're stationed.

Technology can help, says Rodriguez, by providing a common ground so global teams can collaborate on a project, and by communicating through company portals and newsletters.

Sometimes, though, there is no substitute for getting boots on the ground. Rodriguez says some Marriott executives spend most of their time on planes, traveling from one assignment to another.

"[They may have] lived in one country, but have worked in 50 different markets and 50 different countries," he says. They carry the brand and help to establish the business, and then leave for another assignment.

When Smart was faced with the challenge of ramping up hiring in India a few years ago, though, she knew that she had to come up with an innovative solution. "I had a very junior HR team, and I had to hire 1,000 people a month," she says.

So Smart created the equivalent of a global jump team -- a volunteer team of senior executives at various locations throughout the globe who can be deployed anywhere in the world at practically a moment's notice.

"I take a couple of very experienced recruiters ... and they go on the ground," she says. An assignment could last 18 months, but they have two objectives: deliver results and train recruiting teams. Their goal, says Smart, is to stay just long enough to make sure the business and Accenture's culture is humming along before they move on to their next assignment.

The team is not only effective, she says, but she calls it "the best model in our corporate function" for spreading the corporate culture and creating a bridge between global business strategy and local autonomy.

"This answer was all about the partnering," she says. "Now, I'm starting to use that for other functions, such as compensation."

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