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Worldwide Article
Great Global Managers
They don't come from the Great Powers. Here's where to look.
By Karl Moore
Karl Moore is a professor in the Faculty of Management, McGill University, and an associate fellow at Templeton College, Oxford University. He is or has been a visiting professor at the Rotterdam School of Management, Erasmus University, ENPC in Paris, and the Technical University of Helsinki.
Of the many pressing questions that CEOs of global multinationals face, one remains constant: Where will I find the next generation of global managers? Traditionally, multinationals have recruited most of their top executives from their home countries; this is especially true in the head offices of firms based in major power countries such as the United States, Japan, France, the United Kingdom, and Germany. But this approach is changing: Companies recognize that it produces too narrow a pool of candidates and can have a demotivating impact on foreign high-potential employees who view their careers as limited by their nationality. Why bother striving to become an executive at Toyota if one is a gaijin and not Japanese? As firms evolve from nationally centric to multinational to truly transational new approaches, they must adopt new solutions.
Since the early 1990s, I have both studied and consulted with a number of multinationals based in North America, the European Union, and Japan, including Nokia, Volvo, Hewlett-Packard, Accenture, IBM, Pfizer, and Hitachi. Recently, my McGill University colleague Henry Mintzberg and I have been discussing an observation we have both made about top global firms: Certain countries seem to produce more good global managers than their size would warrant; they punch above their weight in their output of global managers. This suggests an important component to incorporate into CEOs' search for the next generation of global managers.
The list of countries includes those generally thought of as the most global in terms of their involvement in world trade and investment: Canada, Switzerland, Belgium, Singapore, Norway, Sweden, the Netherlands, Denmark, Australia, and Finland. Most are in northern Europe; one is in North America; two are on the Pacific Rim. These 10 countries are quite diverse. What do they have in common? To begin with, none of the 10 is a major power. Singapore is an island off the tip of Malaysia; Norway has but three million people. Canada has a population and GNP only one-tenth that of the United States; Australia, one-twentieth.
Why do these countries produce great global managers? Let me first turn to an underlying question: What does it take to be a great global manager?
Research suggests a number of characteristics, the most important being the ability to understand, empathize, and work with multiple cultures. A multinational company investing around the world will face clients and customers from cultures totally different from that of the home country. For example, business in Latin America is based very much on relationships of personal trust: One gets to know a Mexican or Argentinian boss before one presents him with a formal contract. In France, one deals directly with the powerful patron at the top. In Germany, on the other hand, written rules and procedures are all-important: A foreign manager seeking to speak to a German CEO will immediately be directed to the appropriate department head. In contrast to Germany's strict written rules, the Japanese operate on strict unwritten rules, known as kata. Job security is considered in America to produce a mediocre employee, but in Japan, the lack of job security will do the same. The French admire intellectual prowess, the Americans short-term success; Australians are often wary of both.
The old model of multinationals-styled after how the British ran their empire, in which each country manager was sovereign and little was shared between subsidiaries-is a sound approach in a limited set of industries. For most, however, regional if not global integration and synergies are paramount. In such industries, managers will spend a considerable amount of their careers in foreign countries and will need to manage and coordinate with people who have different views of the world than their own. That brings us back to our list of 10 countries: What sets apart these countries and their citizens?
Economically, the 10 are all mid-range economic powers that must constantly take note of what the big powers are thinking. Managers in the United States, Japan, Germany, France, Britain, Russia, China, India, or any other economic or military power can all too easily begin to interpret the world from their own points of view. Having lived in the United States for six years and the United Kingdom for five, I recognize that both Americans and Britons see the world primarily from their own viewpoints.
In the vast U.S. economy, the world's most important, a company can grow to a considerable size without ever leaving American soil. Dominant countries become dominant because of their very success, and their achievements ought to be admired and applauded. There is a downside, however, to such size and success: It can cause managers of big firms in big countries to become complacent and begin to think that, for instance, the American shareholder is the only one that matters or that the Japanese keiretsu system are the only ways to do business. When the global economy hits what Andy Grove of Intel calls a 10X Crisis-a major tectonic shift-such complacency can be dangerous.
Middle-economy countries such as Canada or Finland, and the firms that they host, face the everyday reality that they are not the most dominant or important. The United Nations recently ranked Norway as the nicest place to live, with Canada a close second, but neither can claim to be one of the great powerhouse economies of the world. Citizens of these middle countries often experience a tension between their own and a dominant foreign culture. Belgian Walloons are influenced by France, Belgian Flemings by Holland and Germany. Norwegians are influenced by Denmark, the Swiss by Germany, France, and Italy. The Canadian beaver always looks over his shoulder to ponder whether the American eagle is healthy or angry. What Ottawa thinks or does economically is usually less important to a Canadian than what Washington, London, Brussels, or New York thinks.
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Asia-Pacific