Global Leaders with the Right Stuff

A global mind-set and relocating executives may not be as important to drive business outcomes overseas as previously thought. Instead, a recent study finds, the ability to influence others is a much more needed competency.

Monday, April 16, 2012
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To be effective, do global leaders need to be based in-country? Well, if we're to believe the findings of a recent Corporate Executive Board study, the answer is a resounding "no!"

The study of 11,500 global leaders by the Arlington, Va.-based research and advisory firm finds that being a successful global leader -- one who is able to drive positive business outcomes -- has little to do with possessing a global mind-set or being stationed in a foreign country.

Instead, what matters most, the researchers find, is the ability to influence others.

"Conventional wisdom suggests that having a global mind-set would be important," says Brian Kropp, managing director of CEB.

But, while global leaders need to have a basic level of cultural skills, he says, they "don't need to know all of the intricate details of what it takes to do business at the most granular level in China, India, Europe or South America, all at the same time. They have to be OK at it, but not great."

The study finds, Kropp says, "that you just can't be a global buffoon."

What's important is knowing how to influence people in different markets, he says. That competency, the research finds, is four times more important than having a global mind-set.

Kropp notes that one of the biggest mistakes companies make is thinking that someone with a number of international assignments is going to be a great global leader.

"Just because someone has worked in a different market doesn't mean he or she is going to be great at running a business there," he says. "This [approach] is just as likely to put more bad candidates in the pipeline than good candidates."

Running a business in India, he says, for example, is quite different than running a business in China, even though both are emerging markets.

CEB's findings reflect what George Bradt says he's been seeing.

"Ten years ago, you needed to be there," says Bradt, managing director of PrimeGensis, a Stamford, Conn.-based consulting firm. "But today, it's about building productive relationships and being able to inspire and enable others."

Leaders don't have to be in-country to inspire those working there, he says.

No doubt some employers will see that as good news, considering the expense associated with relocating someone internationally and the increasing reluctance of many global leaders to relocate.

In the CEB study, roughly 65 percent of global leaders indicate they have no interest in relocating abroad.

Travel, however, is another story. Roughly three-quarters of the respondents say they are willing to travel 60 days or more a year.

More often than not, Kropp and others say, employers are well-served by placing greater weight on selecting global leaders who have the right leadership skills, such as influence, and placing less weight on global experience.

Kopp says he wasn't surprised to see influence at the top of the list of competencies.

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"Direct authority goes away in a global market -- so you're no longer able to say to people that they need to do this because 'I'm your boss or your boss' boss,' " Kropp says.

As a result, he says, "the best leaders turn out to be those who are much better bargainers. They're able to make much better trades with people."

According to the CEB research, other competencies that matter include vision, decision making, delegation and creativity.

Not everyone is convinced the CEB findings paint an accurate picture.

Employers should consider the specific needs of the market before determining whether or not to relocate someone there, says Don Ruse, a partner with Axiom Management Partners in Austin, Texas. "In Western Europe, it may not be as critical to have someone on site," he says. "But in Eastern countries like China, Korea, Taiwan and India, face time is essential for growing the business."

The same could be said of Japan, he adds. "Western companies like IBM and DuPont, just to name a couple, weren't successful [in Japan] until they put someone on the ground there."

In Japan, Ruse says, customers want to know they're working directly with someone who's in a position to make decisions. They don't want to hear someone say, " 'Let me talk to my boss and get back to you,' '' he says. "That's a death knell there."

Consequently, he says, having someone who's making those decisions from afar could backfire.

At the same time, companies should also factor in the maturity level of a particular market, Ruse says.

"For companies opening up a new market," he says, "it's much more important to have someone there, versus a mature market where you're just retaining work."

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