Local Leaders Needed

Sunday, September 16, 2012
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When a U.S.-based company opens an office overseas, is the best person to lead that operation (initially, at least) an American? Not necessarily, says New York-based international executive-search consultant Gary Klein, although that has often been the prevailing wisdom at American firms, he adds.

"We Americans tend to take pride in the fact that 'our way' is the best way," he says. "That's often not the case anymore. ... You don't need to have an American in charge in order to have a strong executive."

Nevertheless, a recent survey from Ernst & Young reveals recruiting local talent to create international management teams is not a priority for company leaders at multinational firms. C-suite respondents gave a much lower priority to recruiting locally from international markets than did their manager-level counterparts (16 percent versus 33 percent). The survey, titled Growing Pains: Companies in Rapid Growth Markets Face Talent Challenges As They Expand, polled 810 executives from "major growth markets" worldwide.

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If qualified local talent isn't available to oversee a new venture, the next-best option is to hire a "third-country national" such as a German, British, Dutch or Scandinavian manager rather than sending over an American, says Klein.

But regardless of whether an American or a TCN heads up a new venture, their goal should be identifying and preparing their replacement from the local talent pool so they can return home within a few years, he says.

"Their goal should be replacing themselves with a qualified local national," says Klein.

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