Despite nearly two decades of corporate globalization efforts, many organizations still struggle to find managers who are comfortable and effective in the increasingly global economy. Most suffer both from a lack of cultural awareness when dealing with employees and partners overseas and from a lack of experience managing increasingly complex processes over long distances.
Though a few insightful corporate giants such as General Electric, Cisco Systems, and Intel have made strides in developing successful global managers, many human resources leaders and senior executives continue to be frustrated with the available skills and resources.
But why is it so difficult to develop effective global managers? The answers are as complex as the world's geographies. Each company has its own specific needs and challenges, and every country presents a unique and rapidly changing landscape in which work must be accomplished.
But even so, there are steps companies and managers can take to better prepare for the challenges of managing globally. Our focus here is threefold: (1) to develop a clearer understanding of the challenges of managing people across borders; (2) to instill in new global managers an awareness of and an appreciation for the vast differences among the cultures in which they do business; and (3) to give global managers the tools and support they need to succeed.
The yawning cultural chasm
With the emergence of China and India as the newest and most daunting playing fields, experienced executives and thought leaders agree that softer cultural issues have become the source of notable management problems.
"Managing in a global environment means you manage people who are separated not only by time and distance but also by cultural, social, and language differences," says S. Devarajan, managing director of Cisco Systems Global Development Center in Bangalore, India. Cisco India has more than 1,500 employees and close to 3,500 partner employees.
"The main challenge here is to integrate and coordinate these individuals in ways that will ensure success. You need to build a relationship and have frequent interaction and communication among your team members," he says. "And you also need to be sensitive to and respect the cultural differences. People from different cultures tend to misunderstand each other's behaviors or stereotype people from other countries. It is essential to recognize the discrepancies between cultures in order to work together effectively."
This, of course, is no simple task.
Letting go of the headquarters mindset
Embracing differences among cultures and taking advantage of them to build value begins by addressing what Mary Teagarden, a professor of global strategy at Thunderbird, the Garvin School of International Management, in Phoenix, calls "a headquarters mindset," which she says pervades many global organizations.
Simply put: Too many companies assume that they can do things abroad in the same manner as they do them domestically, says Teagarden. "When I see companies that are underperforming in the global environment, I hear them saying, 'We have people who are just like me at home, and we expect everybody else to be just like me.' And people don't work that way."
|Among the rarest of traits is the ability to balance the need for consistent corporate practices with the need for regional uniqueness.|
Teagarden, who has spent much of her twenty-six-year career analyzing the challenges for managers in a global economy, says she believes that these constraints can be overcome if leaders focus more closely on the empathic qualities of prospective global managers.
"What is essential in a global environment is the ability to work with individuals, groups, organizations, and systems that are unlike our own," she says. "We must also understand what differentiates people and what unites them. Understanding that tensionhow are we alike and how are we differentis a critically important starting point."
At the very least, organizations need to ensure that managers have had the opportunity to build a basic understanding of the new cultures in which they will be immersedwith a particular focus on appreciating how behaviors differentiate.
Beyond this, Teagarden has identified a number of key characteristics that successful global managers possess. Among them are three that resonate loudly: (1) a belief that differences matter; (2) openness to new and different ideas; and (3) cognitive complexity, or the ability to focus on both the "hard" and "soft" metrics in an organizationthe hard quantitative side along with the softer, people side.
These three success factors provide a useful framework for prospective global managers to use as they assess their skills and their preparedness for their new assignment.
When footwear industry veteran Pat Devaney, a senior vice president of production, sourcing, and development for Deckers Outdoor, Inc., arrived at Deckers' China offices in Guongdong Province for a recent meeting, he stopped in the lunchroom to converse with a group of female workers.
"These women come from all over China, and each one orders a specific type of food depending on what region they are from," Devaney says. "As part of the dialogue, they were talking about the different flavors of mountain rat. 'Is grain fed better than fruit fed? Does it taste like cat? Are duck feet as chewy as chicken feet if cooked correctly?'"
Though the conversation was not work related, it illuminated a simple but profound truth about managing in a global environment for Devaney, who has worked closely with operations in Asia for Deckers Outdoor and other companies for nearly thirty years. There are great cultural differences between the people who make up global companies. Understanding how people think, work, eat, and interact in a foreign workplace is crucial to building a successful operation. Most managers, new to these exotic environments, are ill prepared for these nuances.
As the Chinese market economy has developed, Devaney has taken countless American managers on their first visit to China, and he has seen the importance of teaching them the subtle but crucial cultural characteristics of a new geography.
"You have to realize the complexity that is involved in managing people in different countries," he says. "What is important to them? How do they take information you give them and interpret it back to those who work for them?"
Teagarden suggests that executives with Devaney's mentoring skills are in short supply, particularly in small and midsized organizations.
Openness to new ideas
As emerging markets such as China continue to expand, executives must also tap into the management expertise in these geographies and be willing to move international managers experienced in one country to other countries. Too many companies view globalization as a one-way street, which is a shortsighted view, according to Teagarden. The integration of international managers plays a big factor in developing global expertise.
"Moving U.S.-based personnel overseas is one thing, but what about bringing some of the Chinese or Indian managers back here or to Europe or South America and plugging them into the mix?" Teagarden asks. While some large companies have had success with this cross-fertilization, she says, very few small and midsized companies do it at all.
But consider what this can achieve. Mary Kay Cosmetics, for example, set up operations in China and discovered that it was not allowed to sell door to door as it did in the rest of the world. The Chinese government decided it had had enough Amway salespeople invading the country and called a halt to such selling. So Mary Kay's Chinese managers came up with a new distribution system in China, and a savvy marketing manager there led the development and introduction of a new midrange product that sold well in Chinese department stores.
Mary Kay brought this Chinese marketing manager to its Dallas headquarters to replicate what she did in China and help managers see how it could be replicated elsewhere in the firm's global operations. "That is how you use the human supply chain very effectively," Teagarden says.
This kind of cross-fertilization helps domestic managers think about how to be more flexible in their thinking and to appreciate how incorporating different perspectives is good management and good business.
Cognitive complexity: Getting the hard and soft in concert
Among the rarest of traits is the ability to balance the need for consistent corporate practices with the need for regional uniquenessboth in terms of respecting cultural differences across geographies and seizing the unique advantages of each market.
Charles Giancarlo, Cisco Systems' senior vice president of development, feels his firm has learned some important lessons in this regard. In the early stages of Cisco's global expansion, he says, Cisco's senior management allowed managers from different departments to establish their own connections in other countries, including India. The idea was to save money up front by avoiding Cisco's corporate bureaucracy and taking best advantage of the local opportunities.
But it also served to create a distinct shortage of consistency, or a lack of a single corporate culture for employees in other countries to embrace, Giancarlo says. "It's important for local employees to get the benefits of clear reporting structures and of uniformity in processes and procedures that a company like Cisco offers. You also want them to feel a sense of pride and a commitment to the larger organization. Otherwise, the cost savings you thought you had could be short lived. It's also very hard to consolidate later."
But teaching new global managers how to balance corporate philosophy with the unique circumstances of the local market is not easy; it requires an awareness of cultures in the midst of dynamic change. It also demands a healthy dose of independent thinking among some very unfamiliar surroundings. Inexperienced managers may end up clinging to the practices they know and, thus, fall prey to the "headquarters mentality" Teagarden warns of. Or they may succumb to a form of cultural intimidation in which they allow for whatever the local team is used to. In doing so, they open their organization to the problems Cisco once faced.
One way companies can help is to allow new global managers to immerse themselves in their assignments slowly. Teagarden suggests that companies commence a new manager's global assignment by having him work on a virtual teamthat is, managing an overseas process or project while still being stationed in one's home country. By allowing people to learn to work together digitally, companies provide an opportunity for managers to hone the skills they will need to draw on when they are on the ground in a foreign countrybut to do so while still in familiar territory. Diving in headfirst has not shown itself to be a particularly effective approach.
In a similar vein, Cisco India's Devarajan says that his company is addressing the marriage of cultural diversity with consistent management practices by employing "cultural ambassadors" who help coach the engineers and software developers about both company and country cultural issues before they are sent on assignment.
"It is a cultural mind shift," Devaney says. "Even the very small things when you arrive, like where the leader sits at a lunch meeting or where to sit in the car. We would assume riding shotgun next to the driver in front is where the big boss sits, but, in fact, the seat of power is in the back behind the passenger seat. As the economy grows, the relations will worsen because so many people arrive here completely unprepared for what they are up against. Teaching people to understand what is going on around them makes an impact as you build relationships."
See the latest issue of Harvard Management Update.